The ship, said to belong to MRS Petroleum, exploded in Apapa area of Lagos State.
The ship, which exploded at the ever busy Tincan Island Port, caused panic among the people in the vicinity.
Business owners were seen scampering for safety while those using nearby buildings as offices have closed shops.
Fire fighters are battling to bring the raging fire under control.
The National Emergency Management Agency has confirmed the development.
NEMA, in a statement by its Head of Public Relations, Yushau Shuaib, said fire fighters and men of the Agency have been able to respond adequately to the development.
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