The bus immediately caught fire after the collision and a sedan is said to have rammed into it.
"The mishap occurred at around 1.30am at Kude village, about 10 km from Manor. Ten of the injured passengers are being treated at Manor rural hospital while one has been moved to Thane. Those who were injured have sustained medium to minor injuries," said an official.
He also said that the seven charred bodies have been recovered from the bus.
"The bodies could not be identified as they are charred beyond recognition. The bodies have been sent for post-mortem. The district administration is in the process of contacting the bus operator to get the names of the passengers travelling in the bus," Thane district collector P Velrasu told PTI.
Officials said that they are in the process of recording statements of those injured while the families of those killed in the mishap are being contacted.
The tanker belongs to Bharat Petroleum Corporation Limited, one of the largest public sector oil marketing companies in India, and was carrying diesel towards Hazira in Gujarat.
The highway from Shirsad (Virar) to Manor was closed for three hours since 2am. Traffic was diverted from Wada-Bhiwandi road.
In May last year, 14 people were killed and 40 injured in a similar accident involving a luxury bus and tanker close to this spot.
(With PTI inputs)Other similar incidents:
• 7 killed as luxury bus goes up in flames in Karnataka
• 27 feared dead as bus plunges into valley in Thane
• Andhra: 45 killed as speeding bus bursts into flames