Romel César Raña, deputy commander of the Oruro police, told a press conference about the details, while a police confirmed that four adults and four children had been killed.
According to the report, a roadside food stall owner had badly installed the gas tank, causing the explosion, along the route where thousands of dancers were taking part in the Oruro Carnival.
The impact area had a radius of at least 50 meters, due to the poor handling and installation of the pipe linking the gas tank to the cooker.
"The hot oil caused the deterioration of the pipe, causing a gas leak which sparked the explosion," said the police chief.
President Evo Morales, who was not attending the event as he usually does, wrote on Twitter that he was "aghast" at the deaths and expressed his solidarity with the families of the victims.
The area of the blast is invaded every year by large numbers of vendors who sell food and various articles, with no supervision.