World· Edited by Dracure · October 25, 2026

How Natural Gas, Heating Oil, and Propane Reach Homes

A homeowner in the Northeast might use 850 to 1,200 gallons of heating oil over a typical winter and very little the rest of the year, according to the U.S. Energy Information Administration (EIA). Propane consumption is highly seasonal.

Natural gas usually arrives through large pipelines, then flows into smaller-diameter mains and into service lines that run directly into homes or buildings. Heating oil is sold mainly for boilers, furnaces, and water heaters. Consumer-grade propane — the most common hydrocarbon gas liquids (HGL) product delivered to consumers — arrives by truck, in pressurized tanks.

Who Heats With What

Natural gas was the main heating fuel in 47% of homes in 2024, down from 49% in 2010. Electricity was the main space heating fuel for 42% of U.S. households in 2024. Both shares come from the U.S. Census Bureau’s American Community Survey annual estimates, as reported by the EIA.

Heating oil and diesel fuel are closely related petroleum products the EIA calls distillates. Heating oil is used primarily in the Northeast.

Most U.S. residential and commercial sector heating oil is consumed in New England and the Central Atlantic regions, the EIA says. In the winter of 2023–2024, about 4.79 million U.S. households used heating oil — distillate fuel oil — as their primary heating fuel. About 82% of them were in the Northeast Census Region.

LPG, or liquefied petroleum gas, is a generic industry term for propane, butanes, or mixtures of the two. Many homes in rural areas meet most of their heating and cooking needs with propane. Petroleum includes heating oil, kerosene, and LPG, which is mostly propane.

Three home heating fuels, as the EIA describes them

Pipes, Tanks, and Trucks

Natural gas usually reaches where it will be used through large pipelines, the EIA says. From there it moves into smaller-diameter pipelines called mains. From the mains it goes into smaller service lines that run directly into homes or buildings.

Dry natural gas can be safely transported in high-pressure, long-distance pipelines, which the EIA calls the grid. Chemicals called odorants are added so that leaks in the pipelines can be detected.

Refiners and other suppliers send heating oil to storage terminals for distribution to consumers, the EIA says. For example, heating oil is sent to a large central distribution area, such as New York Harbor.

From there it may go by rail or barge to other storage facilities in the Northeast, the EIA says. From those facilities it is trucked to smaller storage tanks close to a retail heating oil seller’s customers. It may also go directly to consumers.

Railroads and trucks also transport HGLs to consumers, the EIA says. Once HGLs are transported close to consumers, they are stored in pressurized — sometimes refrigerated — tanks above or below ground.

Many areas of the United States, such as the West, New England, and Florida, are not served by HGL pipelines. In those areas, the EIA says, railroads often transport large volumes of HGLs to wholesale and bulk purchasers in pressurized railroad tankcars.

Building Up Supply Before Winter

Storing natural gas while demand is low helps ensure enough is available when demand is high, the EIA says. Working gas in storage typically increases from April through October, when overall demand is lower, and decreases from November through March.

In those months, withdrawals from storage increase, mostly to meet natural gas demand for heating. Demand swings daily and seasonally, while production and pipeline imports hold relatively constant in the short term. Large volumes sit in underground facilities, smaller volumes in tanks above or below ground.

Refiners have limitations on how much heating oil they can make to meet consumer demand during the winter heating season, the EIA says. They can raise winter production. But producing more distillate also means producing greater amounts of other petroleum products.

If no market exists for those larger volumes, the lack of demand may limit how much extra heating oil they produce.

So some of what refiners produce in the summer and autumn is stored for delivery in the winter. Suppliers draw on those inventories, or stocks, to help meet demand through the cold months.

Refiners may also delay producing heating oil for winter if consumer demand is high for another product, such as gasoline. That delay may result in lower inventories at the start of the heating season. East Coast distillate imports, on average, are highest during the winter to help meet heating oil demand.

Propane output is generally consistent throughout the year, the EIA says, because propane results from crude oil refining and natural gas processing.

Propane stocks are generally built up during the spring and summer, when consumption is lowest, then used to meet demand in the autumn and winter, when consumption is highest. In New England, aboveground tanks are the primary storage method for propane and butanes.

What Pushes Winter Prices Up

During cold months, heating demand from residential and commercial consumers generally increases overall natural gas demand, and that can put upward pressure on prices, the EIA says. Unexpected and cold or severe weather can intensify the effect, because supply is often unable to react quickly to short-term increases in demand. Gas in storage can help cushion the impact.

Even when crude oil prices are stable, home heating oil prices tend to rise in the winter — October through March — when demand for heating oil is highest, the EIA says. Heating oil prices generally follow crude oil prices.

Home heating oil prices can sometimes increase dramatically, especially during cold weather and winter storms. People are typically using more fuel at the same time that a storm interrupts the delivery systems. Consumption like that can draw down stored heating oil much faster than it can be replenished, and refineries may not be able to keep up.

For propane, the EIA names two more factors behind the retail price, on top of what moves wholesale prices: levels of available supply sources relative to demand, and transportation costs.

Wholesale and retail propane prices can increase quickly and significantly when supply sources are insufficient, or when those sources lack the capacity to respond quickly to large and/or rapid increases in demand.

Propane consumers farthest from the major supply sources will generally pay higher prices for delivered propane. Congestion along rail and water routes, especially in the winter, can contribute to price increases.

Consumers with smaller onsite propane storage capacity, such as residential and commercial consumers, generally pay higher prices per gallon, because the propane has to be delivered by truck in smaller quantities.

The EIA publishes the averages of the heating oil and propane prices reported by respondents to its surveys. Those prices do not include taxes, premiums, or any discounts a supplier may charge or offer.

The EIA says those prices are only a general guide for prices in an area. What a supplier charges can vary widely from the prices the EIA publishes.

Comparing Fuels Sold in Different Units

Heating fuels are measured and sold in different units, the EIA says, such as gallons of oil and propane, cubic feet or therms of natural gas, and kilowatthours (kWh) of electricity. Comparing the price of fuels in dissimilar units is not meaningful.

A more useful comparison, according to the EIA, is the price or cost of fuels based on their heat content. One such measure is dollars per million British thermal units (Btu) of heat content. The formula for this calculation is: [ (Fuel price per unit) divided by (fuel heat content per unit) ] multiplied by 1,000,000.

In the United States, natural gas can be priced in dollars per therm, dollars per million British thermal units, or dollars per cubic foot, the EIA says. In 2025, the U.S. annual average heat content of natural gas delivered to end-use sectors averaged about 1,037 Btu per cubic foot.

At that heat content, 100 cubic feet — 1 Ccf — of natural gas equals 103,700 Btu, or 1.037 therms. Heat content may vary by location, by type of natural gas consumer, and over time.

The EIA also lists other factors related to choosing a heating fuel or heating system. One of them is the efficiency of the appliances that convert fuels and electricity to useful heat.

Tags: energy