The blast took place at Jawarza, near the restive town of Hangu, after a pick-up truck collided with a passenger vehicle.
District police chief Abdul Rashid told AFP from the scene that a bomb disposal team had been called in to investigate, but later confirmed that the blast was caused when the two vehicles collided, causing the gas explosion.
"At least 18 people were killed and 11 others wounded in a gas cylinder blast in a passenger wagon," Rashid told AFP from the scene of accident.
"I can see two exploded gas cylinders in the wreckage of the passenger wagon," he said.
Local police spokesman Fazal Naeem confirmed the blast and casualties.