The incident occured when a pile of husk lying behind Vaibhav Oil factory in Rania area caught fire yesterday and soon spread inside entire premises within no time, they said.
Nearly a dozen oil tankers inside the factory also exploded, spreading flames in nearby vicinity.
16 fire tenders were rushed to spot and it took nearly eight hours to douse fire, which had by the time gutted entire factory. No casuality was reported, police said.
Fire officer SK Singh said the cause behind breakout is yet to be ascertained and is investigated.