Diesel fuel escaped from a crack in the weld between the tank and the inlet pipe and ignited when it contacted a hot surface within the engine compartment.
The operator was using a non-approved device to hold the fuel nozzle handle open.
The NSW Resources Regulator said there were no injuries.
"Under no circumstances should operators override safety controls on refuelling systems," it said.
"Operators must always maintain control of the fuel flow. Investigations are ongoing and further information may be released in future."