The animal, believed to be a Staffordshire terrier or Staffordshire cross, was found dead in a wooded area of north Kirkcaldy, Fife, on Friday afternoon.
Police and animal welfare workers described the premeditated attack as a sickening act of cruelty which would have seen the dog suffer considerable pain before it died.
They believe the incident will provoke a strong response from the public and are appealing for information to help catch those responsible.
A post-mortem examination is to be carried out on the dog. It has not yet been possible to work out what colour its coat was, police said.
Scottish SPCA chief superintendent Mike Flynn said: "This is an extremely sickening case of animal cruelty and we are keen to find those responsible for this dog's painful and violent death.
"It is unimaginable that anyone could be involved in such a cruel premeditated attack on an animal. This poor dog appears to have been killed in one of the most barbaric ways possible.
"We would urge anyone with any information to contact Police Scotland on 101 or the Scottish SPCA on 03000 999 999 as we will work alongside police to ensure that those involved are caught.
"It is also vital that anyone whose dog fits the description and may have gone missing in the area gets in contact with police or ourselves."
Pc Ian Laing, wildlife crime liaison officer at Police Scotland, said: "It is clear that this dog died in horrendous circumstances and will have endured considerable pain immediately prior to its death.
"It is essential that the public assist us in identifying who is responsible for this."
He called for anyone with knowledge of the dog or who saw someone in the area with a dog and a green petrol container to contact them.
He added: "I have little doubt that most people will be horrified at what has taken place and anticipate a strong response from the public. I would also urge whoever is responsible to contact the police."