Ottawa will help offset higher gasoline process that residents of a northern Manitoba town have been paying since they lost their rail link.

Natural Resources Minister Jim Carr says more than $132,000 from the Churchill and Region Economic Development Fund will allow a fuel supplier in Churchill to restore prices to where they were when the rail line washed out last year.

The community on Hudson Bay is a well-known destination for polar bear watching, but severe flooding damaged the rail line in May and railway owner Omnitrax has said it can't afford to repair it.

The track was Churchill's only land link, and a litre of gas cost more than two dollars when Carr visited Churchill at the start of December.