Fuel Oil & LP Gas Dealers

The 4,083 fuel dealers in the US generate revenue by selling heating fuels, such as LP gas, fuel oil, or kerosene, to a variety of customers, including residential, commercial, and industrial accounts. Other sources of revenue include the lease or rental of LP gas (aka propane) storage tanks and related services. Companies may also sell, install, and service appliances and heating/AC systems. Some large companies operate LP tank or cylinder exchange programs.

Declining Demand

Demand for LP gas and fuel oil for heating is declining, with revenue fluctuations driven primarily by pricing and weather conditions.

Seasonality and Weather

Industry sales are seasonal and peak during the “winter heating season," which runs from approximately November through March.

Oct 23, 2026 - Soaring Heating Oil Prices

• Heating oil prices are soaring in anticipation of the colder temperatures ahead, The Wall Street Journal reported in September. New York heating oil prices, which roughly track diesel prices, reached $6.14 per gallon in mid-September, up 66% from a year earlier, as global supply disruptions and tight inventories pushed prices higher. About 4.8 million US households rely on heating oil, primarily in the Northeast and Alaska. Household heating costs are expected to rise 43% this winter, potentially reaching $2,500 for a typical customer. While higher prices may boost dealers' dollar sales, they don't necessarily increase profits. Many dealers earn a fixed markup per gallon, while rising fuel costs increase borrowing expenses, transportation costs, and customer credit risks. Dealers also face challenges serving lower-income households that may struggle to afford minimum fuel deliveries, potentially reducing sales volumes and increasing payment problems.
• Growing concerns about grid reliability, rising electricity costs, and severe weather are creating new opportunities for fuel oil and LP gas dealers to expand propane sales for backup and on-site power generation, according to LPGas magazine. Rather than simply supplying fuel, propane retailers can add value by helping customers assess their energy needs, select generators, size storage tanks, plan fuel deliveries, and maintain backup power systems. Demand is growing for residential standby generators, commercial backup power, combined heat and power systems, and prime-power applications as more propane-powered equipment becomes available. Propane's ability to be deployed quickly, stored on-site, and scaled to a customer's energy needs makes it an attractive alternative to expanding electric transmission infrastructure. For fuel oil and LP gas dealers, offering energy resilience solutions can diversify revenue streams, strengthen customer relationships, and drive long-term propane demand as homes and businesses seek more reliable power sources.
• The Trump Administration's fiscal year 2027 budget proposal would eliminate funding for the Low Income Home Energy Assistance Program (LIHEAP), a key source of heating assistance for low-income households, Fuel Oil News reports. For fuel oil dealers, the proposal raises concerns because LIHEAP helps many customers pay for heating oil and other home heating fuels during the winter. If funding were ultimately eliminated, dealers could face reduced fuel sales, higher customer payment delinquencies, and increased bad debt expenses, particularly in regions with large numbers of LIHEAP recipients. However, the proposal does not immediately affect the program, as Congress controls federal appropriations and has rejected previous Trump Administration attempts to eliminate LIHEAP, often increasing funding instead. While the long-term outcome remains uncertain, fuel oil dealers will be closely monitoring the budget process because LIHEAP plays an important role in supporting customer demand and payment stability.
• Employment by fuel oil dealers was flat in August compared to a year ago, while average wages at gasoline stations and fuel dealers rose 1% over the same period to $18.68 per hour, easing from last winter's highs, according to the latest US Bureau of Labor Statistics data. Sales and employment by fuel oil dealers are highly seasonal, peaking during the “winter heating season," (November through March) and bottoming out in the summer months. Sales for fuel dealers rose in the first half of 2026 compared with the first half of 2025 driven largely by higher fuel prices rather than stronger underlying volume, according to the Census Bureau. Petroleum and heating-fuel prices are surging this year amid Middle East supply disruptions, raising the dollar value of fuel-dealer sales.

Industry size & Structure

The average fuel oil or LP gas dealer operates 1-2 locations, employs 17 workers, and generates about $11.5 million annually.

• The fuel oil and LP gas dealer industry comprises 4,100 companies that employ about 70,600 workers and generate about $46.8 billion annually.
• The industry is somewhat concentrated at the top; the top 50 firms account for 45% of industry sales.
• Large companies include Amerigas Partners, Ferrellgas Partners, Star Group, and Suburban Gas Partners.
• To lower the cost of providing service, most small companies operate locally. Some small companies are family-run and passed down through generations.