He said the death toll was likely to rise.
Eyewitnesses said about 30 motorcycles that had carried villagers to the accident site lay in charred ruins nearby.
In addition, an estimated 20 children were among the dead.
Many people gathered quickly at least in part because a loudspeaker on top of a mosque in the area alerted villagers about the leaking fuel.
Roads in the country were busier than usual because of the Eid holiday.
Local police said initial investigation suggested that the fire was ignited after someone on the spot-lit a cigarette.
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He says numerous bodies were burned beyond recognition and will have to be identified through DNA testing.
The tanker allegedly overturned due to speeding and later burst into flames, according to media reports.
Flames and plumes of large smoke could be seen from a distance as firefighters battled the blaze for two hours.
Rizwan Naseer, Director of Punjab provincial rescue services, said numerous bodies were badly burnt and beyond recognition.
The mishap could have been averted, according to the police, if the crowd had stayed away from the tanker instead of collecting spilled oil in pots.
He said 25 of them have been moved on a C-130 aircraft to Lahore, 10 to Faisalabad and 54 to Multan, with the others still in Bahawalpur Victoria hospital. "The people who were alive were in really bad shape", he said after the fire had been put out. Rescue workers said that about 80 people had been injured.
He ordered Punjab provincial officials to provide whatever rescue and medical personnel were needed and expressed "deep grief over the heavy loss of life in the unfortunate accident".
China also sent its condolences, Chinese Foreign Minister Wang Yi said in Islamabad, where he was holding talks with Pakistan's President Mamnoon Hussain.