The blast occurred in regional capital Makhachkala, which sits on the coast of the Caspian Sea, at 21:40 local time (19:40 BST).A further 60 people were injured while, according to one unconfirmed Russian report quoting doctors, the death toll could be as high as 25.
The cause of the explosion which started the fire is not yet clear.
Pictures showed a large fire lighting up the night sky and a number of fire engines at the scene.
Some 260 emergency workers have been deployed, as has an aircraft to evacuate the seriously injured to Moscow, the ministry said.
Russia's Interfax news agency quoted doctors as saying three children were among the dead.
It added that the fire had spread over an area of 600 sq m (6,460 sq ft) and that there was a danger of further explosions.
An unnamed witness quated by Russian newspaper Izvestia said the fire had started on a car lot opposite the petrol station.
"After the explosion, everything fell on our heads. We couldn't see anything anymore," the witness said.
The Republic of Dagestan is one of 83 constituent parts of the Russian Federation and is the southernmost part of the country. Makhachkala sits around 1,600 km (1,000 miles) from Moscow.
