The warning came as a clip of the scene at the Wang Chan dyke has gained a tremendous following after images of local residents using lighters to lit gases that were seen bubbling up from beneath the surface of the water.
Sarayuth Kaewwichien, energy officer of the Phayao province, issued the warning after making an inspection of the location.
He theorized that the gases were probably produced by decayed organic matter below the surface of the water.
Dr Worawarong Rakreungdet , the deputy spokesman for the Ministry of Science and Technology, said that the first fireball that was ignited was quite large which confirms that the gases were combustible.
He stated that the characteristics of the flames did not indicate flammable oils because flames from these sources would normally spread out in a wide area which is not the case here.
He warns that it is not certain whether the gases stemmed from decaying organic matter as it is also possible that they may have emanated from some unknown underground gas pipes.
He advises everyone to wait for the findings of experts who have been sent to investigate.
Sathon Wicharn-wannaluck, a physics professor at the Chulalongkorn University, also commented that there was a strong likelihood that the gases were produced by decayed organic matter such as animal carcasses or plant residue which have been covered over time by sediment and mud.
He however warns that until the area is cleared by experts who have been sent to investigate, there was a high risk of explosion and local residents should be careful of setting off any flames in the immediate vicinity.