Among those killed were members of the volunteer force, guards of the oil company and civilians, including at least three children, the police officer said.
Iraq's interior minister ordered the dismissal of Saad Nufous, Baiji's police chief, shortly after the blast.
Major-General Abdul-Karim Khalaf, an interior ministry spokesman, said: "There was a decision by the interior ministry to fire the Baiji police chief."
In a separate attack, a suicide bomber struck the funeral of a father and son working as armed volunteers with US forces north of Baghdad, killing four people and wounding 21, police said.