Why Propane? Fuel Cost

There are many reasons why people choose propane over other fuel sources. Since price is the determining factor in many people’s decision-making process, let’s delve into this topic a little.

Propane and Natural Gas

A trap that some people fall into is simply comparing different fuel sources based on price. While this is a good start, what needs to be understood is that propane is an extremely efficient fuel source. An equal amount of propane contains roughly twice the energy as natural gas. However, comparing the two is not as easy as saying, “Well then, if I have to use twice as much natural gas, propane must be way cheaper”. That would make too much sense. If you’ve ever taken a look at a natural gas bill, you know it’s impossible to compare apples to apples. There’s the “Customer Charge”, “Distribution Charge”, “Natural Gas System Improvement Charge”, on top of the “Commodity Charge”, which is your usage. In essence, you are being charged for far more than just the gas you use. When it comes to natural gas, we always recommend that people call their gas company and find out what their bill will be with all fees included. Do you want to know what your bill will be at Keystone Propane? Simply, take the number of gallons purchased multiplied by your price per gallon. Add in a $9.95 admin fee, and presto! That’s your cost. Another fact to consider is that, even with fluctuating prices, propane has an advantage over natural gas. This is due to the fact that you have a tank. You can take advantage by filling up your tank when prices are lower or hold off until prices come down. Another option is enrolling in our annual pre-buy program which will lock in your price for the heating season. You can find more information about the pre-buy program here. With natural gas, you are at the mercy of your utility company and what they are charging when you use their product.

Home Heating Oil

Let’s take another common home-heating source, fuel oil. Here’s where it gets tricky. Scientifically speaking, fuel oil is capable of producing more energy, using the same amount, as propane. So, the energy efficiency argument in favor of propane doesn’t hold up in this case. Now for the tricky part. You need a home heating system to burn both. That’s where the efficiency difference lies. Let’s use brand new, highest efficiency rated furnaces for this comparison. The best propane furnaces can have an efficiency rating of 98%. Its oil counterpart’s highest efficiency rating is 90%. This is the best-case scenario. How many of us actually have a brand-new, state of the art, furnace? More likely, your furnace is older and far less efficient than this “best case scenario”. Another thing to consider is the volatility of the oil market. Prices tend to fluctuate more due to the fact that the U.S. supplements its heating oil supply by importing from other countries. Most of this comes from Canada with a growing market in Latin America.


Since we’re discussing cost in this article, let’s not forget about electricity. On second thought, let’s go ahead and forget about electricity. Anyone who has electric heat says the same thing when they get their bill: “@#$%!”.


Finally, let’s talk about wood-burning heat. If you are one of the lucky ones, you can just go out, cut down some trees and forego your fuel bill altogether. Even if you aren’t this fortunate, the cost for cords of wood or wood pellets will generally be far less expensive than all other types of heating fuel. Remember, we are just discussing fuel cost in this article. We will go over some of the drawbacks of wood burning in later blogs.

Final Thoughts

Fuel cost is just one factor you should use in determining the right type of heat for you. In future articles, we’ll be discussing other elements that should go into the decision-making process. Next up in our Why Propane series is…drum roll please! “Ease of Use”. If you’d like to binge read the “Why Propane” series, please also take a look at “Efficiency” and “Versatility“.