The flight, PK-300 was on the taxiway when the fire was noticed in one of its engines, sources said.
Rescue teams were rushed to bring the fire under control and evacuate passengers, the report said.
"Smoke billowing out of the burning engine escaped into the fuselage after they opened the emergency exit hatch. It was suffocating in there. I saw many passengers who were not feeling well at all," said federal minister Maula Bux Chandio who blamed PIA for its mismanagement and incompetence.
The national flag carrier has a history of technical issues owing to an outdated and ill-maintained fleet, the report said.