Heating oil vs propane cost
At early-2026 prices, propane is the cheaper fuel per unit of heat: ~$32.44/MMBtu effective against heating oil at ~$47.06/MMBtu. #2 oil ran to about $5.54/gal in the 2026 spike while residential propane held near $2.67/gal, so oil's usual per-gallon energy edge no longer offsets its price. Where oil still wins is tank ownership and delivery flexibility, below.
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.
Per-MMBtu math
- Heating oil: $5.54/gal ÷ 138,500 BTU x 1,000,000 = $40/MMBtu raw. At 85% furnace efficiency = $47.06/MMBtu effective.
- Propane: $2.67/gal ÷ 91,452 BTU x 1,000,000 = $29.2/MMBtu raw. At 90% furnace = $32.44/MMBtu effective.
Tank ownership
Heating oil tanks (275/330/550) are almost always homeowner-owned. You buy from any dealer. Propane tanks are typically leased, locking you to the supplier (so they can set the price). Owned propane tanks are possible but uncommon outside of large agricultural users.
Delivery cadence and minimum fill
Heating oil: 100 gal minimum, 4 to 8 fills per season. Propane: 200 gal minimum, 2 to 4 fills per season (larger tanks, less frequent). Oil wins on flexibility, propane wins on fewer trucks at your driveway.
When propane wins
- Fuel cost: at these anchors propane is cheaper per MMBtu, though the national gap narrows in the Northeast, where propane runs above the US average.
- You also need a stove, dryer, generator, or pool heater on propane (single-fuel home).
- You're rural enough that natural gas isn't an option and you prefer fewer deliveries.
When oil still makes sense
- You already own your oil tank and can shop any dealer, versus a leased propane tank that locks you to one supplier.
- You want the higher energy density (fewer gallons stored and delivered for the same heat).
- Local propane pricing is not competitive with your oil dealer's posted rate.