Imantas Juozapaitis, 26, who was driving the car, was killed instantly. His passenger, Einaras Garipovas, 29, died later in hospital of severe injuries.
Although the car was virtually reduced to a pile of scrap metal, no residents of the area were hurt.
The head of the Siauliai Criminal Police, Aldividas Trucinskas, said that the two victims of the car accident were well known to the police.
He said that the two belonged to a splinter criminal group which had emerged last December as a result of internal strife in the original parent-group.
Juozapaitis had a previous conviction for hooliganism and was tried in accordance with the law on organized crime prevention.
Garipovas had been given a prison sentence for rape and hooliganism and was on early release from jail.
The Siauliai Organized Crime Investigation Service officer, Stanislovas Roznys, said that the police investigation results so far suggest that the accident was caused by explosives which the criminals were carrying in the car.
The police have recovered a sawed-off rifle, a Makarov-type gun and several cartridges from the wreckage.