Several Iranian nationals - the largest contingent of foreigners at the Arbaeen pilgrimage that ended on Monday - were among the victims, the Joint Operations Command (JOC) said.
"At least seven buses with pilgrims were inside the petrol station at the time," a police lieutenant colonel told AFP.
The blast struck in the village of Shomali, 120 kilometres southeast of the capital Baghdad and around 80 kilometres from Karbala.
"Those buses were loaded with Iranians, Bahrainis and Iraqis. Ambulances and civil defence are on their way to the site," a police intelligence source told AFP.
Between 17 and 20 million people visited Karbala, home to the mausoleum of Imam Hussein, for Arbaeen, which is one of the world's largest religious events.
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