Hidalgo state police said the leak was first reported at about 5pm local time.
“There was a report that residents were on the scene trying to obtain fuel,” according to a police report. Two hours later, the pipeline burst into flames.
It is not the first time such an accident has occurred.
In December 2010, authorities blamed oil thieves for a pipeline explosion in a central Mexico near the capital that killed 28 people, including 13 children.
That blast burned people and scorched homes, affecting 5,000 residents in an area six miles (10 kilometres) wide in San Martin Texmelucan.
Lopez Obrador launched an offensive against the $3 billion per-year fuel theft industry after taking office Deember. 1. Thieves drilled about 12,581 illegal taps in the first 10 months of 2018 and the country has deployed 3,200 marines to guard pipelines and refineries.
The new administration has also shut down pipelines to detect and deter illegal taps, relying more on delivering fuel by tanker truck. But there aren’t enough trucks, and long lines continued Wednesday at gas stations in several states.