A man was in critical condition and 11 others were seriously injured after a car at a drag racing event in Australia sprayed burning fuel into the crowd.

The incident happened at the Red CentreNATS event in Alice Springs on Sunday.

Shocked spectators filmed fireballs shooting out of a competition car as it skidded round in circles.

"Twelve patients are currently being treated at Alice Springs Hospital. One patient is in a critical condition and the remaining 11 are in a serious but stable condition," the organizers, Northern Territory Major Events Company, said in a statement.

"This is a distressing situation, however all patients are receiving the care they need."

The competition was called off to enable staff to concentrate on helping those in need of medical assistance, organizers said.

Northern Territory Chief Minister Michael Gunner told Australian television that he hoped the event would take place again next year.

"We will be doing everything we can to ensure we learn from what had occurred and next year's event is conducted as safely as possible," he told reporters.

"I think it's important we don't take knee jerk reactions to this, that we take a deep breath, we look at what has occurred and respond to that."