Those responsible for burning a young woman alive in a Papua New Guinea town after she was accused of sorcery will be caught and punished, police say.

Twenty-year-old Kepari Leniata was stripped naked, tortured with a hot iron rod, bound, doused in petrol and set on fire on a rubbish heap in the Western Highlands town of Mt Hagen on Wednesday.

Police say she was accused of sorcery by relatives of a 6-year-old boy who died in Mt Hagen hospital the day before.

"It's an ongoing problem," PNG police spokesman Dominic Kakas said. "Right now you can't try any sorcery claims in court, but it is part of PNG culture and people do die because of it. We need an outlet or avenue to address sorcery allegations. People believe it's something that exists, but it's a crime."

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Both of PNG's national newspapers carried the story with a picture showing a crowd of onlookers - including children. Amidst the smoke and the flame, burning tyres can be seen with people taking pictures on their mobile phones.

- AAP