Imperial Oil says its fire-damaged Ontario refinery is approaching 75 per cent of normal output, easing a shortage that has seen prices rise above $1 a litre at many gas stations and left some with dry tanks.

But the supply situation in the province is still very tight, it says.

Esso stations were among the first to run out of gas after a Feb. 15 Ontario refinery fire.
(CBC)

Imperial previously said the Feb. 15 fire had cut the refinery's gasoline production roughly in half.

"The retail service station network is being restocked and is expected to continue to improve over the next few weeks," it said in an apologetic statement on Wednesday.

"Despite all efforts on our part, events of the past several weeks have put customers and associates in a very difficult position and we deeply regret this inconvenience," it said.

Operations "continue to recover" and the refinery is expected to be back to full capacity by mid-March, it said.

The shortage shut down pumps from time to time at some of Imperial's Esso stations and other outlets the company supplies, including Canadian Tire gas bars.

The drought also hit some stations supplied by rival companies such as Petro Canada, probably because drivers turned away by Imperial were topping up their tanks elsewhere, increasing demand at those pumps.

Reduced competition may have eased the way for price increases.

A weekly survey issued Tuesday by MJ Ervin & Associates of Calgary put the average gas price in 10 Canadian cities at 101.6 cents a litre, the highest level since last August, up 3.6 cents from the previous week.

The average in Toronto was 100.4 cents, up 2.7 cents from the previous week. 

The damaged refinery sits on the Lake Erie shore at Nanticoke, southwest of Hamilton. It normally converts 118,000 barrels of crude oil a day into about 12 million litres of gasoline and varying amounts of jet fuel, heating oil, diesel fuel and other products, an Imperial spokesman said after the fire.

"Gasoline supply to wholesale and commercial customers has improved as refinery production increases. The retail service station network is being restocked and is expected to continue to improve over the next few weeks," the latest statement said.

"Diesel supply has also improved with increased refinery production," it said.

"Additional supply for the Ontario market has been secured from neighbouring markets but the industry supply situation in the province remains very tight.

"Imperial continues to ensure priority needs such as emergency services, home heating customers and other critical demands are met. Home heat customers are not at risk of product shortages as a result."

Another Canadian refinery was hit by fire on Tuesday night — this one a Petro Canada operation on the outskirts of Edmonton — but the damage was said to be limited.

The plant still was operating at 90 per cent of capacity, a manager said.

With files from the Canadian Press