Oil vs. Propane for the Homes.

Real Estate Broker/Owner with DMK Real Estate Ct RE Broker 0789963

Oil vs. Propane for the Homes.

For heating and hot water what is preferred and what is more economical can vary from region to region. Here in the northeast you will find in many area’s homes that have been heated by oil for decades. While some of the larger municipalities have an infrastructure of natural gas, many homes need to have fuel delivered to run the heating system which means your options generally are oil or propane, both requiring tank storage.

Propane has becoming popular and prices seem to have been coming down a bit since the majority comes directly from the United States. Another reason for its popularity is that the new heating systems that use gas are becoming more efficient compared to oil systems. Measuring heating systems is expressed in percentage and is called the Annual Fuel Utilization Efficiency (AFEU). Propane heating systems have become very efficient reaching up to 95% compared to that of oil around 85%.

Along with a more efficient heating system different fuels emit different amounts of carbon dioxide (CO2) in relation to the energy they produce. With Green homes becoming more popular, buyers and sellers are paying attention to a buildings carbon footprint :-

  • For a million Btu of energy produced by heating oil 161.3 pounds of CO2 are emitted.
  • For a million Btu of energy produced by propane, 139.0 pounds of CO2 are emitted.        
  • Natural gas is lowest at 117.0 and coal is higher running from 205 to 228 pounds per million Btu.

How Much Heat per Dollar is simply comparing heating fuels costs that come down to a simple formula of:-

  1. Cost per unit of fuel multiplied by 1 million Btu = X1
  2. Divide X1 by the amount of Heat Value of fuel provide (Btu/unit) = X2
  3. Divide X2 by the AFUE % = cost per million Btu.

Example: - Heating oil cost around $3.77 per gallon and produces 138,500 Btu/gallon. An efficient oil burner will have an AFUE of about 85%.

$3.77 * 1,000,000 Btu = 3,700,000

3,700,000 divided by 138,500 = $27.22

$27.22 divided by 0.85 = $32.02 per million Btu


The Cost of Oil Vs. Propane.

Using the chart below where all the calculations have been done for you let’s compare the cost of Oil vs. Propane at today’s cost. Oil at about $3.77 per gallon and propane at about $3.50 per gallon.

Oil with an efficient system AFUE of 85% at $3.77/gallon will cost you $32 per million Btu.

Propane with an efficient system AFUE of 95% at $3.52/gallon will cost you $40 per million Btu.


Technology and how the system operates is another factor. Older systems need to maintain a constant temperature even when no heat is required, while some new systems can start from a cold start like instant hot water systems. Other systems can vary their heat output depending on the outside temperature so in the fall and spring your heating system does not need to work at full capacity. Both of these above features will save you money and lower your carbon footprint.

Service and Parts is another item to consider, if your local service contractor is not trained on these new systems they can actually do more damage than good along with how easy is it to get parts, no good waiting weeks to get parts from Europe or other areas.


How Much Heat per Dollar ~ University of Maine.

Btu Cost per million



David Popoff is a license Connecticut Real Estate Broker specializing in Sustainability in lower Fairfield County, Connecticut.


DMK Property Management llc a locally owned company serving lower Fairfield County, Connecticut.

Specializing in Residential Property Management that can custom tailor a program to fit the homeowners needs be it short term or long term from rental management to full estate management.

Cell 203-228-0646

E-mail DavidPopoffCT@hotmail.com



Posted by

David Popoff
Connecticut Licensed Real Estate Broker
Realtor® Green
Seller Representative Specialist
Accredited Buyer Representative


DMK Real Estate, Darien, CT.
Cell (203) 228-0646




DMK Realty, 06820 





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Al Raymondi
Ocean View Realty Group in Ormond By The Sea Florida - Ormond Beach, FL
Ormond By The Sea Florida - Home and Condo Sales

Interesting post David, most folks believe propane is the lower cost choice but you have shown that may not be true.

Aug 28, 2013 06:30 AM #1
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

If you install the right type of system and features gas tends to be cheaper, not having to maintain a constant on temperature like most oil systems requires saves.

Aug 28, 2013 06:53 AM #2
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

I have found that when city gas is available, it is a better buy that having propane delivered.

Make it a great weekend!

Aug 30, 2013 11:04 PM #3
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Here I hardly ever see a heating oil furnace and have NEVER seen one heated with kerosene!  And I don't know which has higher maintenance costs - oil appliances or propane.  But maybe that's another blog!

Sep 19, 2013 11:05 PM #4
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David Popoff

Realtor®,SRS, Green ~ Fairfield County, Ct
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