“The fire was caused by the explosion of a gas cylinder being used by passengers cooking breakfast, said Pakistan’s Minister for Railways, Sheikh Rashid Ahmed while talking to media.
The blaze is thought to have spread to at least three carriages.
The accident happened near the town of Rahim Yar Khan in the south of Punjab province.
"Two cooking stoves blew up. They were cooking, they had [cooking] oil which added fuel to fire," Sheikh Rashid Ahmed said.
Passengers bringing stoves onto trains in order to cook meals on long journeys is a common problem, the minister said. Though it is common to carry food onboard, gas cylinders are banned.
"Some of the victims were so badly burnt they could not be identified, and they would need to use DNA to find out who had died," said District deputy commissioner Jamil Ahmed talking to local media.
Prime Minister Imran Khan said he was "deeply saddened by the terrible tragedy" on Twitter, adding that he had ordered an "immediate inquiry".
The train running from Karachi, across most of Pakistan to Rawalpindi, is the Tezgam - one of Pakistan's oldest and most popular train services. It runs daily and takes 25-and-a-half hours.
After an earlier suspension in the wake of the fire, the railways' minister said services have now been restored.