How Much Does Converting From Oil to Natural Gas Heating Cost?

Written by: Staff

According to the U.S. Energy Information Administration, it will cost an average of $2,046 to heat a home with oil and $679 to heat a home with gas.  Heating a home, unfortunately, is one of the most expensive ways to heat a home.

Series 40 Gas Heat by jblevine2004, on Flickr
Series 40 Gas Heat” (CC BY-SA 2.0) by jblevine2004

How much does it cost to convert from oil to gas heating?

There are three factors to consider when converting from oil to a gas hookup:  the equipment costs, the hookup and if other expenses are involved.  When all of these factors, as mentioned below are considered, the grand total to convert from an oil furnace to a gas setup could cost anywhere from as little as $4,700 to more than $12,500 in complex circumstances.  Since all jobs are so unique, consider getting multiple quotes for free from hundreds of reputable contractors in your area on  You can simply explain your job and watch the quotes come in.

For starters, the cost of equipment can cost anywhere from as little as $1,500 to more than $5,500 for a gas-fired furnace.  A basic forced air furnace can cost $1,500 to $3,000, whereas a higher efficiency system can cost upwards of $4,000 to $5,500 or more.

Next, you need to factor in the hookup costs.  For starters, the utility company, if they haven’t already done so, will have to dig a trench from the road to your home, and this process, depending on the utility company, can charge $1,000 to $2,000, but it’s possible some utility companies will waive or even reduce this fee if they want to really add you as a customer.  Next, to add a hookup to the inside of your home, you will then need to hire a contractor in order to perform the job.  Again, depending on some various factors such as your geographical location and the contractor you choose, this can cost another $500 to $1,000, bringing the hookup total to about $1,500 to $3,000.

Lastly, depending on your situation, you may need to factor in additional expenses such as lining your chimney, if necessary, and removing your oil tank.  Lining your chimney, if you install a gas furnace, will likely be required due to the moisture inside the gas exhaust.  If your chimney isn’t lined, it can damage the masonry.  And although you don’t need to remove an oil tank, most owners do.  Removing an above ground tank will cost about $1,000, whereas a buried tank can cost upwards of $3,500.  Lining your chimney, again, depending on your setup, can cost $700 to $2,000.

Real estate agents had talked about this question on Trulia, and they said you should be prepared to spend about $5,000 to $7,000 to see a full conversion.

What's NeededPrice Estimates
Gas furnace equipment- $2,500 to $10,000+ for 73-83% efficiency
- $2,500 to $6,500 for 90-97% efficiency
Gas hookup$1,000 to $2,000 to have utility company to dig trench to your home to install line.
$500 to $1,000 to have the piping hooked up from the meter to the new gas furnance
Lining Chimney (not needed, however, if you purchase high efficiency system)$700 to $2,000
Removing oil tank$700~ if above ground
$3,000 if underground
TOTALstarts at $4,700+

Tips to know:

Before considering the conversion, always make sure a gas line is accessible in your local area.  This can usually be done by calling your local utility company.

How can I save money?

While converting may seem like a costly venture at first, it can pay you back in as little as five years, according to House Logic.

Tax refunds and incentives, depending on where you live, may be available.  Talk with your local gas company to see if they know of any incentives you may qualify for.

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