Fuel cost per Btu varies by fuel, location, and whether the price includes delivery and utility fees. For U.S. households, purchased energy commonly costs about $10-$75 per million Btu (MMBtu), before adjusting for furnace or heat-pump efficiency; natural gas often costs least, while electricity costs more per unit of input energy.
| Item | Low | Average | High | Notes |
|---|---|---|---|---|
| Natural gas | $10/MMBtu | $17/MMBtu | $30/MMBtu | Residential bill-equivalent estimate; fixed charges can raise effective cost |
| Propane | $15/MMBtu | $23/MMBtu | $40/MMBtu | About 91,500 Btu per gallon; delivery and tank terms vary |
| Heating oil | $22/MMBtu | $31/MMBtu | $45/MMBtu | About 138,500 Btu per gallon; seasonal prices fluctuate |
| Electricity | $35/MMBtu | $49/MMBtu | $73/MMBtu | Input energy only; heat-pump output can be several times greater |
Assumptions: Approximate U.S. household energy prices converted to input Btu; actual rates depend on date, region, fees, and contract.
Typical U.S. fuel cost per Btu by heating fuel
For a quick comparison, natural gas is often around $0.01-$0.03 per 1,000 Btu, while delivered propane, oil, and electricity usually cost more. Since one MMBtu equals 1,000,000 Btu, $17 per MMBtu equals $0.017 per 1,000 Btu, or $17 per million Btu. Converting all fuels to the same unit makes price comparisons easier than comparing a gas bill with a propane price per gallon.
These figures estimate the price of energy purchased, not the cost of heat delivered into a home. A 90% efficient gas furnace turns about 90% of its fuel energy into usable heat. A heat pump can deliver more heat energy than the electricity it consumes, so its effective cost per Btu of heat may be substantially below its electricity-input figure.
Household bills also include charges that do not scale directly with fuel use. A monthly gas customer fee, for example, can make the effective rate high for a home using little gas. For a fair estimate, divide the full bill, including recurring fees, by the energy used during the same billing period.
What gas, propane, and oil charges add to a quote
The delivered price is more than the fuel’s energy content: recurring service fees, delivery terms, and equipment expenses can change the effective cost. The table separates common price inputs. Fuel quotes and utility bills do not always show each item in the same way, so the figures are broad planning ranges rather than a guaranteed breakdown.
| Fuel or charge | Typical price basis | Low-to-high range | What changes the bill | Cost treatment |
|---|---|---|---|---|
| Natural gas | Per therm, 100,000 Btu | $1.00-$3.00 | Utility rate, season, usage tier | May include commodity and delivery charges |
| Propane | Per gallon | $1.35-$3.65 | Order size, region, tank ownership | Ask whether delivery and taxes are included |
| Heating oil | Per gallon | $3.05-$6.25 | Season, order volume, delivery distance | Usually quoted as delivered fuel |
| Utility customer fee | Per month | $8-$35 | Utility and service territory | Add to annual fuel expense |
| Tank or equipment rental | Per month or year | $0-$30 per month | Ownership, supplier contract | May be separate from fuel rate |
Natural gas may be billed in therms, hundred cubic feet, or another local unit. One therm equals 100,000 Btu, so a $1.70-per-therm rate corresponds to $17 per MMBtu before efficiency adjustments. Propane suppliers typically quote by gallon, and a delivery minimum can make a small refill more expensive per gallon than a full tank.
Heating-oil pricing often includes delivery, but automatic delivery agreements and service plans may bundle charges. Check whether the quote includes taxes, tank rental, service, or a minimum drop.
How Btu content and appliance efficiency change the math
Compare the cost of useful heat, not just the cost of fuel input, when evaluating furnaces and heat pumps. The simple conversion is cost per MMBtu divided by 1,000 to get cost per 1,000 Btu. To estimate delivered heat, divide the input-fuel cost by the appliance’s efficiency expressed as a decimal.
For example, gas at $17 per input MMBtu costs about $18.90 per MMBtu of delivered heat in a 90% furnace: $17 ÷ 0.90. At 80% efficiency, the same fuel costs about $21.25 per delivered MMBtu. These estimates exclude equipment purchase, maintenance, and fixed utility charges.
For electricity, one kilowatt-hour contains about 3,412 Btu. At 16 cents per kWh, electricity costs roughly $46.90 per input MMBtu. A resistance heater delivers close to one unit of heat per unit of electricity, while a heat pump with a seasonal coefficient of performance (COP) of 2.5 can deliver roughly 2.5 units of heat per unit consumed. At that COP, the effective energy cost is about $18.80 per delivered MMBtu, before equipment and maintenance.
Actual performance changes with outdoor temperature, system sizing, duct condition, and operating settings. Furnace AFUE is a seasonal fuel-use efficiency measure; heat-pump COP varies with conditions. Use annual utility bills or a qualified system estimate for a household-specific comparison rather than relying only on rated efficiency.
Which fuel price thresholds matter most in a home?
Energy use and efficiency can outweigh a small difference in the posted fuel rate. A 100,000-Btu-per-hour furnace running 1,000 full-load hours uses about 100 MMBtu of input energy. At $17 per MMBtu, that input costs about $1,700; a 90% furnace would deliver about 90 MMBtu of heat during those hours.
For natural gas, each $0.10 change per therm equals $1 per MMBtu. At 100 MMBtu of annual use, that rate change shifts fuel expense by about $100, before fixed charges. For propane, a $0.25-per-gallon change is roughly $2.73 per MMBtu because a gallon contains about 91,500 Btu. At 80 MMBtu of annual input, that amounts to about $218.
Capacity and usage matter too. A home needing 60 MMBtu per year will see a different budget impact from a drafty, larger home requiring 140 MMBtu. Heating demand also depends on climate, thermostat settings, insulation, and the number of heating days. A 20% reduction in fuel use saves about 20% of the usage-based charge, but it does not reduce fixed monthly fees by the same percentage.
Check the units on every offer. A utility’s price per therm, a propane supplier’s price per gallon, and an electric rate per kWh cannot be compared directly. Convert each to cost per MMBtu, then account for appliance efficiency and recurring charges.
Regional delivery and utility rates shift the comparison
Location can move a fuel estimate by 10%-40% or more, especially for delivered fuels and high-cost electric territories. Areas with extensive gas pipelines often have lower residential gas rates than places relying on delivered propane or oil. Rural customers may also face longer delivery routes or minimum order requirements.
Propane prices can vary substantially between states and even among nearby suppliers. A winter delivery in a remote location may cost 15%-40% more than a large-volume summer purchase in a competitive market. Heating-oil prices respond to regional supply and seasonal demand; a 10%-25% seasonal swing is possible, though timing and local conditions differ.
Electricity rates commonly range from about $0.12-$0.25 per kWh across U.S. service areas, with some plans or locations outside that range. That converts to about $35-$73 per input MMBtu. Time-of-use rates can make evening heating more expensive, while a utility’s monthly customer charge can affect the total cost at any usage level.
For local comparisons, use the delivered propane or oil quote and the utility’s full rate schedule for the same month. A supplier’s advertised price may require a minimum delivery, a particular payment plan, or tank ownership. For electricity, confirm whether the quoted rate includes transmission, distribution, and other bill charges.
Three household examples show the delivered-heat difference
Comparable annual heat needs make the price contrast clearer than comparing fuel units alone. The examples below assume each home needs 60 MMBtu of useful heat per year. They exclude equipment replacement, maintenance, and fixed monthly service charges; actual consumption varies with climate and home condition.
| System and assumption | Input needed | Price assumption | Estimated annual fuel cost | Useful heat |
|---|---|---|---|---|
| 90% gas furnace | 66.7 MMBtu | $17 per input MMBtu | $1,134 | 60 MMBtu |
| 80% propane furnace | 75 MMBtu, about 820 gallons | $23 per input MMBtu | $1,725 | 60 MMBtu |
| Heat pump at seasonal COP 2.5 | About 7,031 kWh | $0.16 per kWh | $1,125 | 60 MMBtu |
These are illustrative energy-only estimates, not predictions of a particular bill. The gas figure is calculated as 60 ÷ 0.90 × $17. Propane input is 60 ÷ 0.80, then converted using approximately 91,500 Btu per gallon. The heat-pump example converts useful heat to electricity using COP 2.5 and 3,412 Btu per kWh.
At a 90% gas-furnace efficiency, $17 per input MMBtu works out to about $18.90 per useful MMBtu. An 80% propane furnace at $23 input cost works out to $28.75 per useful MMBtu. With 16-cent electricity and COP 2.5, the heat pump is about $18.80 per useful MMBtu. A lower winter COP or higher electric rate can change that result.
When do seasonal fuel prices change the budget?
Propane and heating oil buyers often have more control over purchase timing than customers on monthly utility billing, but storage and contract terms matter. Delivered-fuel suppliers may offer lower off-season rates when demand is lighter, while cold snaps can increase demand and tighten delivery schedules. Savings are not guaranteed and can be offset by storage, financing, or price-plan fees.
Ask for both a one-time delivery quote and any fixed-price or capped-price plan in writing. Compare the total annual charge, not just the advertised per-gallon rate. A low rate tied to automatic delivery, a service agreement, or a minimum annual purchase may not be the least expensive option for a low-use household.
Natural-gas and electricity customers generally face utility schedules rather than shopping for each delivery. Some utilities adjust rates seasonally or offer time-of-use pricing. Review the current tariff and compare the rate during the heating months, when consumption is highest, instead of using a summer bill as the annual benchmark.
How can a household lower its cost per useful Btu?
The most controllable savings usually come from reducing heat loss, comparing full delivered rates, and avoiding unnecessary equipment or service charges. Sealing drafts and improving insulation can lower annual heating demand regardless of fuel type. For a house using 100 MMBtu of input fuel annually, a 10% reduction saves 10 MMBtu; at $23 per MMBtu, that is about $230 in variable fuel expense.
Compare at least two local delivered-fuel quotes using the same order size and delivery terms. Confirm taxes, tank rental, minimum drop, automatic delivery, and payment fees. For utilities, include fixed monthly charges and any delivery components. A lower commodity rate may not produce a lower bill if additional charges are substantial.
Before replacing a working system, compare repair cost with full installed replacement cost and expected efficiency. A small efficiency gain may not recover a large installation premium when annual fuel use is low. Conversely, an aging unit with repeated repairs or poor performance may justify replacement; request estimates that state equipment efficiency, labor, disposal, permits, and warranty terms.
Do not choose a system based only on the lowest cost per input Btu. Compare the expected cost per useful Btu using realistic seasonal efficiency, local energy rates, and likely annual demand. That calculation is more useful for budgeting than a fuel price alone, particularly when comparing a furnace with a heat pump.