"It is believed that the heat source for the explosion was an unflued gas fire run off an LPG bottle in the room. This gas fire also exploded, resulting in extensive damage to the walls, windows and ceilings of the house.''
Senior sergeant Gavin Briggs said the incident highlighted the dangers of handling LPG and similar products and the ease with which such gases could ignite.
"Tragically, this incident has had a terrible consequence for the two young men involved. The message is simple: gas is an extremely dangerous and risky substance to play around with. Don't do it.''
Police have not yet been able to speak to the two young men because of the seriousness of their injuries.
They have also not managed to speak with a third person seen leaving the house at the time of the explosion, who they say was likely to have been a friend of the pair.
Fire Service East Otago assistant area commander Trevor Tilyard said this morning there were two explosions: first the two cylinders allegedly being used for huffing and then the cylinder attached to the free-standing gas heater.
The first blast knocked over the cylinder fuelling the heater, which started ``pumping out a huge fire in that room'', Mr Tilyard said.
Kate Nicol said she was at working when she heard an explosion and rushed outside to see the brick house on fire and "a man on fire screaming''.
''[He was] on the ground still burning and smouldering, and there was another one from the house yelling `help me, help me, I need some warm water'.''
The third gas bottle exploded about three or four minutes later.
"The cylinder exploded and propelled into the upper reaches of the room and was embedded in the wall,'' Mr Tilyard said.
He said the explosion happened just as firefighters were entering the house, though none were injured.
Walls were displaced and the part of the roof blown off in the explosions.
Mr Tilyard said the windows were blown out and glass spread as far as the driveway of a house across the road.
A Christchurch fireman and his wife, who are holidaying near Dunedin, were driving past when the explosion happened.
Mr Tilyard said the fireman and a passer-by probably saved a life by performing first aid so quickly.
A local fire truck was returning to base when it saw smoke from the burning home.