The real question is this: What’s the least expensive energy option for delivering a given quantity of heat energy into your home? To answer this you need to do some conversion. Propane is sold in litres and so is furnace oil. But a litre of propane provides about 30% less energy than a litre of furnace oil. Then there’s the issue of different efficiency ratings for propane and oil furnaces, as well as different costs per litre for the two fuels. Assuming you’ll be paying $1.02 per litre for oil and 0.76 cents per litre for propane (the current prices where I live), and assuming you’ll install an oil furnace with a 90% efficiency rating or a propane unit with 96% efficiency, the operating costs for the two fuels are very similar. You’ll be paying about $31.00 for one million btus of heat delivered to the living space of your home with oil, and just under $33.00 for the same thing with propane. What’s surprising is that the cost for the same amount of heat delivered by electricity is actually slightly lower than both. Assuming a total cost of 0.10 cents per kilowatt hour, one million btus of heat delivered inside your home with electricity is just under $30.00. All these relationships shift as prices change, but at the moment that’s the way they compare. If your current furnace is in reasonable shape, keeping it for a few more years may be the most economical option. A new model will probably be slightly more efficient, but the price of a new unit will also take years to recoup.
This is a good question because optimal energy decisions aren’t easy to make. Different measuring systems, energy contents and appliance efficiencies are the reason why.