My parents recently put in propane heat, and the local delivery companies have told them that they more propane you use the cheaper it is. The more units you buy the less they charge you.

This is an update to my last post. Since Dec 1, 2008, the cost of NO.2 heating oil has dropped dramatically. As of Dec 12, 2008, we are now purchasing NO.2 heating oil in southern Maine for as low as $1.89 per gallon. Based on this price for NO.2 oil, using an 83% efficient furnace or boiler, it will cost you $16.43 per million BTUs of output. If you burn propane at $2.85 per gallon, it will cost you $37.49 per million BTUs of output, or more than twice the cost of NO.2 oil.

Hope this helps
Gene Thomas
gdlt@pivot.net

British thermal units (BTUs) is the measure of heat. Residential grade oil (NO.2) provides 138,600 BTUs per gallon. Propane only provides 91,600 BTUs per gallon. Anotherwords, propane only provides 66% of the heating BTUs as NO.2 oil. The current price for No.2 oil in Maine, as of Dec 1, 2008, is about $2.70 per gallon, and current price for propane is in Maine is about $2.85 per gallon. Assuming that there are two furnaces, one that burns oil and one that burns propane, and they are both 83% efficient. If you burned NO.2 oil, it would cost you $23.47 for every million BTUs of output. If you burned propane, it would cost you $37.49 for every million BTUs of output. Fuel doesn't necessarily burn more efficiently, but one boiler or furnace can be more efficient than another, based on its construction and how it burns the fuel. Some gas furnaces, such as condensing types, are as nuch as 93% efficient. One good way to save fuel, whether you burn oil or propane, is to get the most efficient unit as possible.

Hope this helps
Gene Thomas
gdlt@pivot.net

I am and Oil Heat and Propane Technician in Southern Maine. To me there is no comparison betwen Oil and Propane costs, Oil is much cheaper. You need to burn 1.42 gallons of propane to equal the heat recieved from one gallon of heating oil. The appliances usually ruin with in 5-10% of each other as far as efficency.
Think of this way if you burn 1000 gallons of Oil a year, youll need 1400 gallons of propane. Call you local retailer and ask then for the cash price of each. Do the math. Propane compaines know this, that why they recomend it to you. They make more money off of proane. You must always remeber when talking to a SALESMAN they're are in it for them. not you. I dont sell either Oil or Propane just service the products. Dont be duped by the propane "myth".

As a home owner, I have found that propane has consistently been cheaper than oil. I've used propane here for 12 plus years and that has always been the case. I can't recall ever getting a delivery that the propane cost more than the current average price of oil. My entire house is run on propane- refrigerator, water tank, small area heaters and a generator. (The house is solar powered). I use wood as heat when home. I have a 1000 gal tank which is filled toabout 75% capacity. My most recent deliverey of fuel was $3.09 at a time when oil was about $1.00 more. Of course, I do get a large volume discount. A friend of mine had a recent delivery and it was $4.70 a gallon but he just uses it for cooking and water so he doesn't use much. Comparing value by looking at BTU, I think oil probably proides more btu's per gallon.

Obviously oil is very expensive right now, but not only that it emits a lot of carbon into the atmosphere. Propane is a better choice for many reasons. Oil & propane are hard to compare, because one comes in a compressed liquid gas form and the other a pure liquid. I have both in my home, and find that propane is slightly more expensive per unit (although with the turmoil in the oil industry, it could be different this heating season). However, the great thing about propane is that it is more efficient. It burns better & more thoroughly. I find that it lasts longer, and the tank gets filled less frequently than my oil tank.

OK, I hesitated to answer here because I have not run the numbers recently. However, two years ago I ran detailed costs/efficiencies on propane vs. oil heat, for a 6,000 SF well insulated home in Southern Maine. Oil was a cheaper fuel source.
At the time, the size of the house would not change the answer - oil was cheaper. Size of the house/energy efficiency would affect total cost savings one over the other, but not the answer.
Now this answer may not hold true outside of Maine, where natural gas is common. There is a perception of many people that gas is cheaper than oil which may be true where natural gas prevails. Also, it might be possible that there are some initial costs savings with a gas furnace i.e. you might be able to buy a cheaper gas furnace. But these costs savings would be relatively small and not justify the increased heating costs over the life of the furnace. IMHO.
Sorry can't give you more details - I did not save the calcuations but ran them with our HVAC contractor.. But I believe that oil is the way to go in Maine.

I think gas has been higher but who knows what this coming winter's prices will be like.

I don't know, but I want to know the answer also!! I did a bit of research today on the 2 types of heating and found out that oil is more efficient. It seems as though propane is going to be more expensive, but I think it might depend on the house...it's age, how small/big, where it's located (by water) etc. Can anyone out there with propane heat give me (us) and idea of what you pay in the coldest winter months- and how big your house is, it's age, etc.??