The attack on Sunday evening targeted the village of Auno on a key highway linking to Maiduguri, the capital of Borno state.
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They "killed not less than 30 people who are mostly motorists and destroyed 18 vehicles", Bundi said in a statement after visiting the scene.
"Many of the drivers and their assistants who were sleeping in the vehicles were burnt alive," said Babakura Kolo, a member of a state-backed militia battling fighters in the area.
Kolo told the AFP news agency the fighters took away three buses carrying women and children to Maiduguri which had parked in the village for the night.
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"We still don't know how many women and children they took away but the number is huge," he said.
There was no immediate claim of responsibility for the attack.
The highway has been increasingly targeted by the Islamic State West Africa Province (ISWAP) group in recent months. In 2016, ISWAP split from the Boko Haram armed group, which has waged a decade-long armed campaign in northeast Nigeria that has killed tens of thousands and displaced millions from their homes.
The United Nations has complained of a surge of violent attacks in recent weeks across the conflict zone.
The military says the tactic has helped to stem attacks but local residents and aid workers say it appears to have bolstered the attackers by leaving vast swaths of territory unprotected.
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