Heating oil vs natural gas cost
The bar chart
Basis: EIA national residential prices, March 2026 (heating oil and propane from the week of 2026-03-30 SHOPP survey; natural gas and electricity from the March 2026 monthly series). Electricity is the US average (~$0.19/kWh); New England runs higher (~$0.28/kWh), which lifts the heat-pump bar. Kerosene (K-1) is modeled as #2 oil plus a typical refining premium; EIA runs no weekly K-1 retail survey.
Annual fuel-only delta (764 gal household)
A 1,800 sqft zone-5 house on our gallons model burns about 764 gal, which is 90 MMBtu of delivered heat a season (764 gal x 138,500 BTU x 85% furnace). On oil that costs 764 gal x $5.54/gal = $4233/yr. Delivering the same 90 MMBtu from a 92%-efficient gas furnace at $16.96/MMBtu effective is about $1525/yr. Fuel-only saving at 2026 prices: ~$2707/yr. Scale it: a house burning twice the oil saves twice as much.
Payback on a quote you have been given
We are not going to tell you what a hookup costs. Nobody publishes a national figure for it, and the number that decides your payback is the one on your utility's written estimate, not an average. What we can do is divide. Put your own all-in conversion quote in, including the furnace and the internal gas piping, not just the service line:
- $3,000 quote: about 1.1 years at this winter's oil price.
- $8,000 quote: about 3.0 years.
- $15,000 quote: about 5.5 years.
Those are quote size divided by the ~$2707/yr fuel saving above, nothing more. And the saving rides a price spike. If oil settles back toward its 5-year norm (~$3.75/gal, per the 25-year table) the annual saving falls to ~$1340/yr, stretching that $8,000 quote to about 6.0 years. Base the call on the oil price you expect to pay for years, not this winter's peak.
Who pays for the line, and why that is moving
For decades the gas utility absorbed much of a new connection and recovered it from everyone's rates, which is why hookups were often quoted as free. Massachusetts has moved against that. In Interlocutory Order D.P.U. 20-80-E, issued 8 August 2025 in the Department of Public Utilities' Future of Gas docket, DPU directed the gas distribution companies to discontinue line extension allowances except where a building has no technically feasible alternative to natural gas. DPU subsequently clarified that 20-80-E is not a final decision, and the change runs through each utility's Climate Compliance Plan proceeding, which has no statutory deadline. The docket is public, so check its current state rather than taking ours: it is filed under 20-80 in the DPU Future of Gas investigation. Other states set their own line extension rules and are not all moving the same way. So the practical advice is narrow and checkable: before you model a payback, get the utility's written estimate and ask in writing whether an allowance is being applied to it.
When oil wins
- No gas main on your street, so you are funding a main extension, not a service connection.
- The all-in quote pushes payback past the years you plan to stay in the house.
- You already have a recent high-AFUE oil furnace with years of life left in it.