Propane vs Natural Gas Cost Calculator

By converting both to delivered BTU at the same furnace efficiency. One US gallon of HD-5 propane holds 91,452 BTU of chemical energy (NIST higher heating value), and one therm of natural gas holds exactly 100,000 BTU (the utility-standard definition). A therm of gas therefore delivers about 9.4 percent more heat than a gallon of propane, so the same furnace burns about 1.09 gallons of propane for every therm of gas it would have burned to keep the house warm. The calculator divides your annual heating load by the per-unit BTU and the AFUE for each fuel, then multiplies by your local price. The same load and the same AFUE apply to both sides, which is what makes the comparison fair.

Pipeline distribution scales in a way truck delivery cannot. A natural gas utility pushes millions of therms through one underground pipeline with marginal cost close to zero per added home, while propane has to be trucked from a bulk terminal to a 250 or 500 gallon tank in your yard, refilled six to twelve times a year. The truck, the driver, and the regional storage all show up in the per-gallon price. EIA data for 2024 to 2026 shows residential natural gas at roughly $1.00 to $1.80/therm and residential propane at $2.50 to $3.50/gallon, which works out to about $10 to $18 per million delivered BTU for gas versus $30 to $40 for propane. Propane is two to three times more expensive per delivered BTU in every region that has both.

Three situations. First, no utility access: rural and exurban homes without a gas main on the street have to choose between propane, oil, or electric heat, and propane is usually the cheapest of those three after equipment cost. Second, off-grid or seasonal use: a hunting cabin or summer home that uses 50 to 150 gallons a year cannot justify a $5,000 to $15,000 utility hookup, and propane runs at the same price as full-time installations. Third, when the natural gas monthly service charge offsets the per-therm savings: most US gas utilities bill a fixed $10 to $25 per month even if you burn zero therms, so a very low-use home (under 200 therms per year) sometimes comes out ahead on propane once that fixed charge is factored in.

Propane is a byproduct of crude oil refining and natural gas processing, so its retail price tracks heating oil and crude markets, not the utility wholesale gas market. When refining margins tighten in a cold winter or a refinery goes down for maintenance, propane spot prices at Mont Belvieu (the Texas hub) can spike 30 to 50 percent in weeks, and retail propane follows within a month or two. The 2014 polar vortex pushed Midwest residential propane from $2.20/gal to $4.50/gal in eight weeks. Natural gas utility tariffs, by contrast, are regulated by state Public Utility Commissions and only re-rate quarterly or annually, which damps the volatility you see on a utility bill. If you heat with propane, the calculator's break-even price is the number to watch when you sign a fixed-price refill contract in late summer.

AFUE (Annual Fuel Utilization Efficiency) scales both fuels by the same factor, so the cheaper fuel stays the cheaper fuel regardless of AFUE. What does change is how many gallons or therms you burn. A modern condensing furnace at 95 percent AFUE burns about 16 percent less fuel than an 80 percent mid-efficiency unit for the same delivered heat, and about 35 percent less than a 70 percent atmospheric furnace from the 1980s. On the default 80 million BTU load, that is roughly $200 to $400 of saved propane or $80 to $150 of saved gas per year, which is why replacing an old 70 percent furnace with a 95 percent condensing unit usually pays back in seven to twelve years before any tax credit. The break-even propane price is also independent of AFUE: it depends only on the energy ratio of propane to natural gas, so at $1.20/therm gas, break-even propane sits at $1.10/gallon at every furnace efficiency.