ACHR News reported that HVAC contractors in Northeastern states are helping customers with oil furnace maintenance and replacements as a way to "offset expensive heating oil costs". That framing is a sound starting point for any homeowner staring at a delivery ticket, because the useful question is rarely which fuel is cheapest on paper. The useful question is which fuel delivers usable heat to your rooms at the lowest cost. The full story is in ACHR News coverage of contractors preparing customers for higher heating oil prices.
Start with the bills you actually paid
Pull the last twelve months of oil deliveries and electric statements, plus any gas bill if you have one. Write down the price per gallon for oil and the price per kilowatt-hour for electricity. Include delivery fees and the fixed monthly charge on the power bill, because those are part of what you pay for heat. Guessing these numbers from memory is how people end up comparing last year's prices to today's.
Convert each fuel to heat
Fuel prices come in different units, so put them in one. Heating oil carries roughly 138,000 Btu per gallon, and one kilowatt-hour of electricity is 3,412 Btu. Divide each price by its Btu content to get a cost per Btu of fuel. Then divide by the efficiency of the device that turns the fuel into heat. For an oil burner, use the combustion efficiency on the most recent service report. For a heat pump, use its rated efficiency at the outdoor temperatures you actually see, not one peak number from the spec sheet.
The formula is simple: cost per useful Btu equals (price per unit divided by Btu per unit) divided by efficiency.
Put real efficiency into the formula
An oil furnace that converts most of its fuel into house heat is not the same as one that is dirty, badly tuned, or running a worn pump. A tired nozzle or a flue that is not drawing right can move the efficiency number more than a price change does, and the bill will show it before the thermostat does. The same logic applies to a heat pump. Its seasonal rating is a useful comparison, but its running cost in January depends on outdoor temperature, defrost cycles, and whether the auxiliary heat strip engages when it should not. A clamp meter on the compressor and a note of supply and return temperatures will tell you more than the brochure.
Run the numbers with placeholder values
The figures below are assumptions for illustration, not market data. Say oil costs 4.00 dollars per gallon and your furnace delivers an effective 0.75 of the fuel's heat to the rooms. Electricity costs 0.25 dollars per kilowatt-hour, and an assumed heat pump averages a seasonal coefficient of performance of 2.5 in your climate. Oil comes out to about 38.65 dollars per million Btu of delivered heat. The heat pump comes out to about 29.31 dollars per million Btu. Replace every assumed value with your own bill and your own equipment data before drawing any conclusion.
Test the ratio across a season
A single month proves little. Heat pumps lose capacity as it gets colder, and oil furnaces work hardest in the coldest weeks, so the comparison should cover a full heating season or at least the months you actually heat. Log average outdoor temperature or heating degree-days beside each bill. If the heat pump only looks good in shoulder season, the January answer will be different. Keep these notes in the same file as your oil service records so price and efficiency changes sit side by side.
Keep the attic out of the math
Any delivered-cost comparison assumes the house holds the heat you buy. An uninsulated attic or a leaky ceiling plane can make both fuels look worse than they are. Before you blame the furnace or the heat pump for high bills, check insulation depth and the air seal at the attic floor. If the roof itself is part of the heat loss picture, a roofing contractor such as Keys Roofing can look at the deck and ventilation, which is a separate question from the burner or the compressor.
Bring the table to the next call
Take the price table, the unit conversions, your equipment nameplates, and the year's bills to the next service visit or quote. Ask the contractor to state efficiency at your local design temperature, not only the rated peak, and ask how the proposed work would change that number. The goal is not to pick the cheapest fuel on a ticket. The goal is to know what each dollar buys in heat before anyone asks you to sign.