Heating Oil Basics → Oil vs. Propane
If you heat with oil, you've probably gotten the call — or the knock. A propane company says you'll save money by switching. Sometimes you'll get a quote and a same-week install offer. Before you sign anything, here's the real math on heating oil vs propane — in dollars, not BTUs.
This is the heart of it. A gallon of heating oil produces about 138,500 BTU of heat; a gallon of propane about 91,500 BTU (U.S. Energy Information Administration). That means a gallon of propane delivers only about two-thirds the heat of a gallon of oil.
So if propane and oil cost the same per gallon, propane is actually ~50% more expensive to heat with. For propane to break even on fuel cost alone, it has to be roughly a third cheaper per gallon than oil. Any pitch that compares "propane at $2.89" to "oil at $3.89" without that adjustment is comparing apples to oranges.
Forget the per-gallon sticker price. Because of the BTU gap, propane has to be roughly a third cheaper per gallon than oil just to break even on fuel cost. If it's only a little cheaper per gallon, you'll pay more to heat with it; if it isn't cheaper at all, it's not close.
So the real test isn't a fixed dollar figure — it's the cost per unit of heat at today's prices where you live. Prices move constantly, so check the current numbers rather than trusting any threshold (including ours):
Current heating oil prices → Current propane prices → Compare cost per unit of heat →
The BTU math above assumes your old oil system and a new propane system are equally efficient. They often aren't. A modern condensing propane furnace or boiler can reach 90–98% AFUE, while older oil burners commonly run 80–87%. A more efficient unit wrings more usable heat out of every BTU — which narrows the gap.
But it rarely erases it, and there's a catch: that efficiency edge only shows up if you're replacing aging equipment anyway, and the fair comparison is a new propane unit against a new oil unit — not against your 20-year-old burner. Even pairing a 95% propane unit against an 85% oil one, propane still has to be roughly a quarter cheaper per gallon to break even. The pitch's per-gallon price still doesn't tell you what you'll actually pay.
Converting from oil to propane isn't free. Expect some combination of:
| Item | Typical cost (2026) |
|---|---|
| Remove / abandon the oil tank | $500–$3,000 |
| Propane tank — leased vs. bought | $0 leased (+ annual lease) / $1,700–$4,300 to buy & set |
| New propane furnace/boiler (less for a burner-only conversion) | $1,500–$7,500 |
| Remove & dispose of the old furnace/boiler | $500–$1,500 |
A full conversion commonly runs $5,000–$13,000+ (typical as of 2026) — more if your oil tank is buried or you buy the propane tank outright. Spread over a fuel saving that may or may not exist, the payback period is often a decade or more — sometimes never.
It's not always a bad deal. Propane can be the right call if:
Don't take a salesperson's number — or ours. Put in your ZIP and compare oil, propane, and other fuels on a cost-per-heat basis:
Compare heating fuels for your ZIP →
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Usually not, gallon for gallon of heat. Propane carries about two-thirds the BTUs of oil per gallon, so it has to be roughly a third cheaper per gallon just to break even on fuel cost. Rather than trust a fixed price threshold (prices move), compare the cost per unit of heat at today's local prices — check current oil and propane prices and run them through the calculator.
Commonly $5,000–$13,000+ (typical as of 2026) once you count oil-tank removal, the propane tank, a new or converted burner/boiler, and hauling away the old equipment. That one-time cost is what a per-gallon price comparison leaves out, and it's what usually makes the payback period a decade or longer.
Most pitches compare per-gallon prices without adjusting for energy content, and skip the conversion cost. Ask for the comparison in cost per million BTU or cost per season, and make sure conversion is included.
When your oil equipment is already failing, when propane is genuinely cheaper per BTU where you live, or when you want propane for cooking, a generator, or hot water. If your oil system works and oil is competitively priced locally, conversion rarely pays back quickly.
It helps, but usually not enough. A new condensing propane unit (90–98% AFUE) delivers more usable heat per BTU than an older oil burner (80–87%), which narrows the gap — but only if you're replacing equipment anyway, and only when you compare a new propane unit to a new oil unit. Even then, propane typically still has to be around a quarter cheaper per gallon to break even on fuel.
Compare oil, propane, and other fuels for your ZIP →