UPDATE 3-Imperial Oil rations gasoline after refinery fire

(Adds Imperial statement)

By Scott Haggett and Jeffrey Jones

CALGARY, Alberta, Feb 21 (Reuters) - Gasoline shortages following a refinery fire have forced the closure of nearly a fifth of Imperial Oil Ltd.'s (IMO.TO) 400 company-owned Esso service stations in Ontario, as the firm rations supplies.

Gasoline prices in Toronto, Canada's biggest city, surged, according to one Web site, and Imperial's competitors are struggling to meet the additional demand caused by its woes.

"We are seeing a lot of demand," said John Peck, a spokesman for Shell Canada Ltd. SHC.TO. "We're working to manage that."

Imperial is 69.6 percent owned by U.S. oil major Exxon Mobil Corp. XOM.TO. About 75 of its 400 stations in Ontario were shut on Wednesday because they had no gas to sell, the company said.

Other retailers supplied by Imperial were also running short. Canadian Tire Corp. (CTC.TO), which relies on Imperial to supply the gas bars at its retail stores, said some of them have run dry.

"We're trying to replenish supplies whenever we can," said spokeswoman Lisa Gibson. "We can't guarantee when that will be. For some it might be later on today, for others it may be a day or two."

Shell Canada also had to close two stations in the Toronto region briefly on Tuesday after they ran out of fuel.

The troubles began last week when a fire broke out in the crude processing unit at Imperial's 118,000 barrel a day Nanticoke refinery in southern Ontario.

The fire was quickly put out but Imperial isn't accepting new oil deliveries until repairs are complete.

Though Nanticoke can still produce some gasoline from feedstock supplied by pipeline from its Sarnia, Ontario, refinery, Imperial will not say how much production has been curtailed, citing competitive reasons.

In a statement issued late on Wednesday, it said Nanticoke is expected to resume output next week at reduced rates.

The company is in contact with the federal and Ontario governments while it co-ordinates deliveries to customers to ensure priorities such as emergency services and home heating demands are met.

The fire came as supplies were already tight because of production issues at competing refineries, cold weather that slowed tanker deliveries on the Great Lakes and a Canadian National Railway Co. (CNR.TO) strike that halted some train shipments.

"The fire at Nanticoke last week further exacerbated an already tight situation," Imperial spokesman Pius Rolheiser said. "As a result of this unusual combination of events, Imperial has had to apportion supplies of gasoline and other refined products to customers in Ontario."

Michael Ervin, president of petroleum consultants MJ Ervin & Associates, said the temporary loss of production from a Nanticoke-sized refinery would not normally have a major impact on supplies in the huge Ontario and northern U.S. region.

"But, given that all other refiners in the area are running close to capacity and given that there are severe restrictions on moving product around right now, it does pose a problem," Ervin said.

So far, there has not been a big jump in wholesale prices because there has not been a major drawdown in inventories, he said.

However retail prices have climbed. According to www.torontogasprices.com, some gas stations in the Toronto area are now charging up to 96.7 Canadian cents a litre. A week ago the average price in the Toronto area was about 84.8 Canadian cents a litre.

Competitor Petro-Canada PCA.TO has told its wholesale contract customers that it will supply all of their average monthly volumes, but no more than that until the impact on retail operations is better known.

"Our inventory is relatively healthy, although we're watching closely for any strong uptick in demand, because our ability to manage any additional demand is somewhat limited," Petro-Canada spokesman Jon Hamilton said.

The company no longer operates a refinery in Ontario. It supplies the region with gasoline, diesel fuel and other petroleum products largely from its 130,000 barrel a day Montreal plant.

Petro-Canada has already seen an increase in customer numbers at its own retail sites, Hamilton said.

($1=$1.16 Canadian)