Propane vs. Heating Oil?

As propane prices drop and heating oil prices rise, many consumers are considering making the switch.

In most areas of the United States where homes and businesses don’t have access to utility gas lines, propane is the heating fuel of choice. In the Northeast US, consumers have long had the option of using home heating oil. In fact in some states such as Massachusetts, nearly 40% of all residential homes are heated by oil.

Increasingly however homeowners are giving propane a new look. With the advent of massive natural gas exploration in North America, domestic supplies of propane have increased dramatically. So dramatically that not long ago propane spot prices fell as low at 50 cents per gallon.

Propane prices have recovered since then, as exports have increased, but prices are still historically low, and are likely to remain so for the foreseeable future. That puts increased pressure on home heating oil which has increased in price along with the price of crude oil.

With crude oil prices rising, some heating oil consumers who need to upgrade their systems are considering propane. If price trends continue as they are, propane may maintain enough of a pricing advantage to convince many to make the switch.