Incredible CCTV footage has emerged which appears to show a man setting fire to a shop in Sydney, Australia, causing a huge explosion and the partial collapse of the building.

Footage seized from the neighbouring Wentworthville Hotel shows a man carrying a jerry can of petrol into the building then walking around the corner as a police car passes by.

Soon after, the building explodes and collapses, and police and firefighters run in to drag the man free from rubble and the flames.

Police will allege in court that the man caught on CCTV was the shop's owner, Mr Jomaa, a person eight people risked their lives to save.

The 36-year-old, who broke both his legs, injured his pelvis and neck, and received burns to his face in the explosion, was refused bail at a bedside hearing at Royal North Shore Hospital yesterday.

The Pendle Hill man is accused of causing the explosion that devastated his Jomaa Market shop and a flat above - the blast blowing the resident out of the building and onto the footpath.

Syris Persia, who was asleep upstairs when the building exploded, remained in Westmead Hospital with back injures yesterday. The CCTV footage shows him climbing out of the smoke and rubble to sit, stunned, on the footpath. Eight police officers were treated for treatment for burns and smoke inhalation, while another officer was treated for severe smoke inhalation.

All were later discharged.

Police will allege Mr Jomaa bought 10 litres of petrol in a red plastic jerry can from the BP Service Station across the road from his shop at 4.10pm on Monday.

Mr Jomaa has been charged with destroying property with intent to endanger life and remanded in custody to appear in Central Local Court on October 17