Heating Oil Prices Vs Natural Gas Prices

When it comes to heating a home, there are many options that have a variety of benefits and drawbacks. The most common solutions are oil, natural gas, and electric. Oil (HHO) systems are popular in the northeastern United States and in rural areas because they are self-contained, and the delivery company can also perform any service needs. However, it has been growing in popularity, and you might be unsure which solution is right for you.

Pricing Comparison

As the furnace is the heart of the system, it should be the first consideration. The efficiency of a furnace is measured in the Annual Fuel Utilization Efficiency (AFUE). In the past decade or so, oil furnaces have significantly increased in efficiency. Depending on the unit, the efficiency usually rates between 80 and 90 percent. Since circumstances such as temperature, furnace material, age, and installation affect the performance of a system, the AFUE is not a static rating. Instead, it attempts to rate the unit based on its average output over the entire season. The rating indicates how much of the combustible fuel is ignited and converted into heat. Since some energy will always be lost in the heating process, no system is actually 100 percent efficient.

A furnace utilizing home heating oil costs less than a natural gas-burning unit. Units can be 10 to 20 percent more efficient than traditional oil systems, but the increased output is expensive. Gas systems are usually 10 to 25 percent more expensive than oil furnaces. For a large-cost item like a furnace, it might take years to offset the added expense of switching fuels.

A 95 percent AFUE, such as is attainable with natural gas, only offers a four percent savings over modern oil furnaces.

Heat Comparison

Energy is measured in British Thermal Units (BTUs). One BTU is about 1055 joules, or the amount of energy needed to heat one pound (.45kg) of water by one degree Fahrenheit. To compare, a kitchen match generates this amount of energy.

An oil system provides more heat per BTU of energy than a natural gas system. So, they are technically less efficient, but provide more heat for each unit of energy. To be precise, HHO produces 138,500 BTUs per US gallon. The price for one gallon tends to hover around $2. For comparison, gas is sold in units of therms. One therm is 100,000 BTUs. Between 2011 and 2015, prices in Massachusetts hovered around $1.50 per therm. That means heating oil prices are about the same price per BTU, but HHO delivers more heat for the energy.

Also, heating oil prices tend to fluctuate depending on a variety of market factors. Since HHO can be stored in underground tanks, you could stock up for winter when prices are low.


To summarize, home heating oil prices tend to be slightly higher than natural gas, and the furnaces tend to be somewhat less efficient. However, the oil delivers more heat per BTU of energy, and the furnaces are 10 to 25 percent cheaper.