Natural gas vs heating oil: the 40% saving the salesman promises

Natural gas vs heating oil: the 40% saving the salesman promises

A salesman knocks on the door, shows a calculator and drops the magic figure: switching from an oil boiler to natural gas saves 40%. The promise sounds good until you sit down to check what lies behind that percentage. Because the discount does exist, but it is calculated on the price per kilowatt hour, not on the final bill. And the final bill includes things the salesman does not mention: a monthly fixed charge, meter rental, mandatory maintenance and an initial investment that can reach around 6,000 euros for boiler, radiators and connection.

The starting point was a homeowner with oil heating to whom a salesman offered the switch with that 40% saving as bait. The majority response was unanimous on the essentials: distrust the seller and do your own maths.

The kilowatt hour: heating oil at 0.100 euros and natural gas at 0.042

The figures used in the industry point to a real differential. A calculation circulating in the installation trade since 1993 holds that propane is 20% cheaper than heating oil, natural gas 26% cheaper than propane, and overall natural gas 41% cheaper than heating oil. That percentage matches, almost to the decimal, what the salesman was promising.

The breakdown per unit of energy is more illustrative. Mains natural gas, on a medium-high consumption tariff, comes to 10.08 euros per month fixed plus 0.042 euros per kilowatt hour. Heating oil, excluding transport, is around 0.871 euros per litre, which at 8.685 kilowatt hours per litre works out at 0.100 euros per kilowatt hour. Propane comes in at 0.0639 euros per kilowatt hour. Electricity, with 10 kilowatts of capacity, starts at 17.19 euros per month fixed plus 0.14 euros per kilowatt hour.

For a monthly consumption of about 5,000 kilowatt hours — a cold winter month — the comparison looks like this: mains natural gas, 220 euros; propane, 319; heating oil, 500; electricity, 717. On paper, heating oil costs more than double natural gas. The full calculation, with all the assumptions and unit conversions, is enough to keep you busy for a good while.

The fine print: fixed fees, maintenance and a 6,000 euro investment

Here is where the problem starts. Natural gas is not only paid for by what you consume. There is a monthly fixed charge, meter rental and periodic maintenance, all payable even if the boiler is switched off all year. Heating oil, by contrast, generates no minimums when unused.

The initial investment is the other major obstacle. A case detailed in the trade puts the complete installation of a gas boiler and radiators in a detached house at around 6,000 euros. Against that, a low-consumption electric radiator alternative was installed for 1,200 euros at a professional's price. With those numbers, paying off the gas requires intensive use over many years.

There are more variations. In a development where heating oil was dominant, the offer consisted of 50 metres of free pipework, but the owner had to pay for the installation from the street to the boiler, around 1,000 euros including meter registration, plus the new boiler. The middle option: sign up for six months paying a 4 euro minimum plus meter rental, cancel and keep the pre-installation for the future.

The captive customer and the monopoly that sets the price

The strongest argument against is not arithmetic, it is structural. With natural gas you sign a contract with a single supplier that sets the price without real competition. With heating oil, by contrast, there are dozens of distributors and room to negotiate. Heating oil can be bought from whoever offers the best price; mains gas cannot.

Add to that the perception that the price of gas is not as stable as promised. The energy content of gas varies depending on the source field, with heating values ranging between 9.6 and 11.45 kilowatt hours per normal cubic metre. And the bill includes charges unrelated to consumption, such as underground storage. In the Canary Islands, where the piped network does not reach, the most frequently cited alternative is butane.

The alternatives: firewood, butane, heat pumps and electric radiators

The cost ranking used by the most experienced users, from cheapest to most expensive, would be: firewood at village prices, coal, a butane or propane heater, a heat pump with a coefficient of performance of 4, sawdust briquettes, natural gas and, last of all, any electric resistance heater, whatever its brand name.

Firewood and biomass appear as the cheapest option when there is a nearby supply. The heat pump — air conditioning with a heating function — gains ground by offering cooling and heating in the same unit, fast warm-up and scheduling. Its Achilles heel is the price of electricity and the fact that the heat does not last as long as that of a radiator.

Low-consumption electric radiators divide opinion. Some argue that if used only during off-peak hours, with time-of-use tariffs, the kilowatt hour is very cheap, with no maintenance or breakdowns. Others counter that this calculation ignores taxes and the capacity charge, and that the real price is closer to 0.08 euros per kilowatt hour. The full calculation, with the bill in hand, is the only thing that settles the argument.

What to do if you already have heating oil

The most repeated consensus: if the oil installation works well, it is not worth switching just for the promise of savings. Heating oil requires storing fuel, takes up space and needs more delicate maintenance, but it ties you to no contract and involves no minimum payments.

If natural gas already reaches the door, the balance tips towards gas, especially in homes with intensive use. If it does not, the recommendation is to invest in insulation first and then decide on the system. And in every case, the figure that unsettles: the 40% saving is calculated on the kilowatt hour, but the final bill is determined by the fixed fees, the investment and the years it takes to pay it off.