The cause of the blast was not immediately clear while local media reported that some buildings had collapsed. The explosion was heard in the Oyo state capital Ibadan, 130 km (80 miles) from the commercial capital Lagos.
Some residents said the blast shattered windows of their homes.
"Relevant agencies are carrying out search and rescue operations at the scene of the incident. Residents of the state are urged to remain calm as the Oyo State Government is on top of the situation," Oyo state said in a statement.
The state's commissioner for information Prince Dotun Oyelade earlier said "residents of Ibadan and immediate environ experienced an uncommon explosion about 8 p.m. (1900 GMT) this evening."
(Reporting by Tife Owolabi and Ardo Hazzad, writing by MacDonald Dzirutwe; Editing by David Gregorio and Howard Goller)
