Officials have said oil thieves might be to blame for causing a leak leading to the large blast on the hillside outskirts of Dosquebradas, a city of 175,000 people west of the capital Bogota.
"We have 11 dead and 81 injured," Carlos Mario Garcia, the local representative of the National Risk Management Office told AFP after the blast around 4:45 am (0945 GMT).
"People were apparently stealing fuel," the city`s mayor, Luz Ensueno Betancur, told Caracol Radio about possible causes for the accident. He said the thieves likely caused a leak that led to a fire and then the explosion.
Garcia, the risk management official, said the accident was likely caused by a fuel leak but did not address the cause of the leak.
Dozens of homes, many of them makeshift houses built of corrugated metal, were affected, and at least 10 of them were destroyed, according to the risk management office.
"Many patients are badly burned on their face and body, and many people have multiple fractures" as a result of the explosion, said Rafael Lucas, director of the hospital in San Jorge Pereira, a town near Dosquebradas where some 28 blast and fire victims were taken.
President Juan Manuel Santos took to social media service Twitter to express "solidarity with the victims of the accident in Dosquebradas," adding that Mines and Energy Minister Mauricio Cardenas was "on top of the situation."
The explosion was under investigation and technicians from state oil company Ecopetrol were expected to deliver a report.
The fire was about 95 percent controlled, officials said, although fuel contaminated a nearby stream and authorities were advising nearby residents not to use water from that source until it was deemed safe. (*)
Editor: Kunto Wibisono
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