At least 79 people have been killed and 81 injured after a pipeline ruptured by suspected fuel thieves exploded in central Mexico.

Forensic experts filled body bags with charred human remains where the explosion happened on Friday night (local time) by the town of Tlahuelilpan in the state of Hidalgo.

Federal Health Minister Jorge Alcocer said dozens more were missing, with family members gathering at the site hoping to find their loved ones.

At least 79 people were killed in the explosion. (AP)

President Andres Manuel Lopez Obrador said he will reinforce security along the country's pipeline network, if necessary, but that pipelines remain the most efficient and cost-effective way to distribute fuel.

His administration has been transporting more fuel via trucks over the past three weeks in an attempt to dismantle a sophisticated network of fuel theft that costs state oil company Pemex $3 billion a year.

The veteran leftist on December 27 ordered pipelines be closed temporarily to stop illegal taps draining billions of dollars from the heavily-indebted Pemex.

The blast unfolded on Friday night (local time). (CNN)

At least 79 people have been killed and dozens are missing. (CNN)

"Far from stopping the fight ... against fuel theft, it's going to become stronger; we'll continue until we've eradicated these practices," Mr Obrador, who has said he will step up security in sensitive areas, said.

Video on social media of people filling buckets from the pipeline during daylight hours in the presence of the armed forces prompting questions about why authorities had not acted.

The government said soldiers reached the scene after Pemex detected the illegal tap but could not secure the area in time.

The ground is scorched where an oil pipeline exploded in Tlahuelilpan, Hidalgo state, Mexico. (AP)

"At some point there were too many people there and the army and military personnel withdrew to avoid problems," Public Security Minister Alfonso Durazo told broadcaster Televisa.

"It was just as they were withdrawing that the explosion occurred."

Aerial footage on Mexican television showed what appeared to be smouldering corpses scattered near the blaze.

The pipeline was ruptured by suspected fuel thieves. (AAP)

President Lopez Obrador said his shutdown greatly reduced theft but it sparked fears for the economy, as well as triggering shortfalls in central Mexico, including Hidalgo.

The damage also raised the prospect of a new setback in the government's bid to restore fuel supply.

In December 2010, authorities also blamed oil thieves for a pipeline explosion in a central Mexico near the capital that killed 28 people, including 13 children.

That blast burned people and scorched homes, affecting 5000 residents in an area 10 kilometres wide in San Martin Texmelucan.