The heating oil vs. natural gas debate comes up every time oil prices spike. Neighbors with gas heat seem to pay less. But is that always true? The real answer depends on equipment efficiency, current fuel prices in your area, and — if you're considering switching — conversion costs that can take years to recoup. Here's how to run the actual numbers.
Heating oil and natural gas are priced in completely different units — gallons vs. therms (or MCF). To compare them fairly, you need to convert to cost per BTU, the unit of heat energy.
| Fuel | Unit | BTU Content per Unit |
|---|---|---|
| Heating Oil (No. 2) | Gallon | ~138,500 BTU |
| Natural Gas | Therm | ~100,000 BTU |
| Natural Gas | CCF (100 cubic ft) | ~102,600 BTU |
So heating oil is more energy-dense per unit than natural gas. A gallon of heating oil contains about 38% more heat energy than a therm of natural gas. This means a direct price comparison ($X per gallon vs. $Y per therm) is misleading without adjusting for energy content.
Equipment efficiency compounds the comparison. Modern high-efficiency equipment exists for both fuels, but the baseline efficiency levels are different:
| Equipment Type | AFUE Efficiency Range |
|---|---|
| Old oil boiler/furnace (pre-2000) | 60–75% |
| Modern standard oil boiler/furnace | 80–86% |
| High-efficiency oil boiler | 87–95% |
| Old natural gas boiler/furnace | 65–80% |
| Modern standard gas furnace | 80–96% |
| High-efficiency condensing gas furnace | 96–98% |
High-efficiency condensing gas furnaces have a slight efficiency edge over the best oil equipment. But if you have an older oil system, upgrading to a modern oil boiler may close that gap substantially while avoiding a full fuel conversion.
To compare fuels on equal footing, calculate the cost per million BTU (MMBtu) delivered to your home, accounting for equipment efficiency:
Formula: (Price per unit ÷ BTU per unit) × 1,000,000 ÷ Efficiency
Example with sample prices (adjust for current prices in your area):
| Scenario | Price | BTU/unit | Efficiency | Cost/MMBtu |
|---|---|---|---|---|
| Heating oil @ $3.80/gal | $3.80 | 138,500 | 83% | ~$33.10 |
| Heating oil @ $3.80/gal (high-eff) | $3.80 | 138,500 | 90% | ~$30.50 |
| Natural gas @ $1.50/therm | $1.50 | 100,000 | 85% | ~$17.65 |
| Natural gas @ $1.50/therm (high-eff) | $1.50 | 100,000 | 96% | ~$15.63 |
Switching from oil to natural gas sounds appealing when oil prices are high, but the conversion cost can be substantial:
Total conversion costs range from $5,000 to $25,000+ depending on your situation. At current price differentials, payback periods of 8–15 years are common for homes not near existing gas mains.
There are legitimate reasons to stay on oil rather than convert:
Modern bioheat (a blend of petroleum heating oil with biodiesel) offers a middle ground. B20 bioheat (20% biodiesel) burns in any oil appliance without modification, produces fewer emissions, and is increasingly available from Northeast dealers. It typically costs a few cents more per gallon but lowers your carbon footprint without a system conversion.
Some Connecticut dealers now offer B20 as standard, and rebate programs are available for higher-blend bioheat in some states. Ask your dealer what blends they carry.
If you're staying on oil, the best way to cut costs is getting dealers to compete. OilOutpost makes it easy.
Get Competing Quotes →Related: Heating Oil vs. Natural Gas: Should You Convert? A Homeowner's Guide · Oil Heat vs. Natural Gas: The Real Cost Comparison for Connecticut Homeowners