Is heating oil or natural gas cheaper?

Natural gas is typically cheaper per BTU than heating oil. As of late 2025, natural gas costs approximately $12–17 per million BTU nationally, while heating oil costs $28–40 per million BTU depending on your region. However, switching from oil to gas requires installing a gas line and converting your furnace or boiler, which can cost $5,000–$15,000.

How much does it cost to convert from oil to gas heat?

Converting from heating oil to natural gas typically costs $5,000–$15,000. This includes removing the oil tank ($500–$3,000), installing a gas line from the street ($1,000–$5,000), and purchasing a new gas furnace or boiler ($2,500–$7,000). Costs vary widely by region and whether gas service is already available on your street.

Is heating oil more efficient than natural gas?

Heating oil produces more BTUs per unit (138,500 BTU per gallon vs 100,000 BTU per therm of gas), but modern gas furnaces are slightly more efficient at converting fuel to usable heat (93% vs 85% for oil). The net result: oil produces more heat per unit but costs more per unit, making gas cheaper in most markets.

What are the pros and cons of heating oil vs natural gas?

Heating oil pros: no gas line required, on-site fuel storage gives independence, higher BTU content per unit. Heating oil cons: higher fuel cost per BTU, price volatility, tank maintenance, delivery scheduling. Natural gas pros: lower cost per BTU, continuous supply (no tank), less price volatility, cleaner burning. Natural gas cons: requires gas line infrastructure, not available in all areas, no on-site storage (vulnerable to supply disruptions).

Heating Oil Basics → Oil vs Natural Gas

Heating Oil vs Natural Gas: Which Is Cheaper?

Heating oil and natural gas are the two most common home heating fuels in the Northeast. If you have oil heat and gas service is available on your street, you've probably wondered: would switching to gas save money?

The short answer is usually yes — but the upfront cost of converting matters. Here's a clear comparison using current fuel prices and real BTU math.

Check prices in your area: Compare Costs

Cost per Million BTU

The fairest way to compare fuels is cost per million BTU (MMBTU) — a universal measure of how much you pay for the same amount of heat.

Fuel	Typical Price	BTU per Unit	Efficiency	Cost per MMBTU
Heating Oil	$3.50–$4.75/gal	138,500	85%	$29.70–$40.40
Natural Gas	$0.90–$1.80/therm	100,000	93%	$9.70–$19.40

At typical prices, natural gas costs 40–60% less per BTU than heating oil. The gap narrows when oil prices are low and widens when oil spikes.

Annual Heating Cost Estimates

For a typical 2,000 sq ft home in the Northeast (approximately 5,500 heating degree days):

Fuel	Annual Cost	Monthly (Heating Season)
Heating Oil @ $4.00/gal	$2,630	$438
Natural Gas @ $1.40/therm	$1,180	$197

That's roughly $1,450/year in savings at these prices. Over 10 years, that adds up to $14,500 — well above the conversion cost for most homes.

Get your exact numbers: Enter your ZIP code in our Heating Cost Calculator to see local oil prices, gas rates, and estimated annual costs for your area.

The Conversion Question

Switching from oil to gas isn't free. Typical costs:

Gas line installation: $1,000–$5,000 (from street to house)
New gas furnace/boiler: $2,500–$7,000
Oil tank removal: $500–$3,000
Total: $5,000–$15,000

At $1,450/year in savings, a $10,000 conversion pays for itself in about 7 years. If gas service isn't on your street yet, the gas line extension from the utility can add $2,000–$10,000+ and the payback stretches further.

Pros and Cons

Heating Oil

Pro: No gas line needed — works anywhere with truck access
Pro: On-site storage means you're not dependent on a pipeline
Pro: Higher BTU content per unit of fuel
Con: Higher cost per BTU in most markets
Con: Price can spike sharply in cold winters
Con: Requires tank maintenance and scheduled deliveries

Natural Gas

Pro: Lower cost per BTU — typically 40–60% cheaper
Pro: Continuous supply — no tank, no delivery scheduling
Pro: Cleaner burning with lower emissions
Con: Requires gas infrastructure on your street
Con: No on-site storage — vulnerable to pipeline supply issues
Con: Conversion cost of $5,000–$15,000

When Staying With Oil Makes Sense

Gas isn't always the right move:

No gas service: If there's no gas line on your street, the extension cost can make conversion uneconomical
Recent boiler: If you just replaced your oil boiler, converting wastes that investment
Planning to move: If you're selling within 5 years, you likely won't recoup the conversion cost
Low oil prices: When oil drops below $2.50/gal, the savings gap narrows significantly

If you're staying with oil, the best strategy is shopping for competitive prices. Compare local heating oil prices to make sure you're not overpaying.

Bottom Line

Natural gas is cheaper per BTU in nearly every market. If gas service is available and you plan to stay in your home 7+ years, converting typically makes financial sense. If not, focus on getting the best oil price — the spread between local suppliers can save you hundreds per year without any conversion cost.

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