"The casualties involved are very high ... we are counting 25 bodies," Ifeanyi Omano, a community leader, told Reuters, adding: "We aren't certain of their identities yet," a local leader and a resident told Reuters, adding that the dead included some minors.
Omano and local resident Chikwem Godwin said the explosion took place in the early hours of Friday, adding people from several communities were killed.
A local police spokesman previously confirmed the incident but did not disclose the numbers of casualties.
Illegal refining is common in the oil-rich Delta region of Nigeria as impoverished locals tap pipelines to make fuel to sell for a profit. The practice, which can be as basic as boiling crude oil in drums to extract fuel, is highly dangerous.
Nigeria is Africa's largest oil exporter. Officials estimate it loses an average of 200,000 barrels per day (bpd) of oil - more than 10% of its production - to those tapping or vandalizing pipelines. The theft and vandalism contribute to enormous pollution in the region.