The fire, which started Sunday after heavy bombings by the rival militias, raged through the Bregal oil depot and ignited two fuel tanks. According to the interior ministry, the first fuel tank on fire contains some six million litres of oil, Xinhua reported.
Witnesses said that dark columns of smoke could be seen miles away, and that Islamist fighters and pro-secular militia were still vying for Tripoli's international airport nearby despite the fire.
The Libyan government has ordered all citizens within a three km radius of the oil depot to evacuate immediately. It called on the militias for ceasefire immediately to avoid a "humanitarian and environmental disaster".
Firefighters were battling to put out the fire, but constant crossfire between the militants and spreading fire forced them to leave the area.
The recent battle between Islamist fighters and pro-secular militia around Tripoli International Airport has killed at least 97 people and wounded over 400, paralysing most of the air traffic in the country.
Although rounds of negotiation have been held and a truce was reached earlier this month, the rival groups were still combating in the city.
China, France, Germany, Netherlands, Britain and the United States have already told their citizens to leave Libya due to the severe security conditions.