The incident occurred around 8 pm Friday, when the conductor of the bus plying on the Tivsa-Chandur Road route demanded that the passenger buy a ticket.
Reportedly drunk, the passenger entered into a heated argument with the conductor over the fare.
As the bus plied, the argumentative passenger grabbed a can of petrol that he had carried with him, emptied it on himself and set fire, an official of Tivsa Police Station said.
The man died of burn injuries.
As the bus ground to a halt, at least 17 other passengers sustained burn injuries.
"We are investigating the case to ascertain the victim's identity and what might have led him to set himself afire in a public bus. Apart from injuries to other passengers, the bus is also damaged," investigating officer Assistant Police Inspector R S Shaul said.