The government had promised to end fuel queues

The breakage set off an oil fire and cut supplies to two of Nigeria's main oil refineries.

It is not clear who carried out the attack, but it was close to the oil city of Warri, where militant youths from the Ijaw community had threatened to blow up oil facilities as they demand greater political representation.

Nigeria has been gripped by shortages of fuel for more than a month, with long queues outside petrol stations.

The government had blamed it on "political enemies" trying to discredit it ahead of general elections later this month.

Election threat

"It is serious vandalism. Explosives were used. That pipeline is still on fire now," Ndu Ughamadu, public affairs manager for the Nigerian National Petroleum Corporation (NNPC) said on Sunday, a day after the attack.

Nigeria is the world's sixth largest oil exporter

Ethnic violence around Warri had led to an almost 40% cut in Nigeria's oil output but oil companies had started to reopen some facilities in the region.

The army had claimed to have re-imposed order in the area but Ijaw leaders had warned the oil companies against increasing production.

During the fighting, at least eight military servicemen and four oil-company employees were killed, according to officials.

Dozens of villagers also lost their lives, said people who fled the area.

Hundreds of troops have been sent to the area and navy gunboats were patrolling the rivers and creeks around the oil company operations.

Frustration

The Delta, the area of Nigeria's south-west which plays host to much of the oil plant in the country, has long been a hotbed of tension.

The Ijaw and several other groups say that their region deserves a greater cut of the income from oil revenues than the central government is willing to grant - not least because of the environmental and social damage they accuse the oil companies of creating.

Last week, the Delta State electoral commissioner warned that elections in Warri may have to be postponed because of the violence.

The BBC's Dan Isaacs in Lagos says the worsening fuel shortages will be a source of deep frustration for President Olusegun Obasanjo who, when he entered office four years ago, made the ending of fuel shortages in the country one of his main pledges.