Seattle's Heating Oil Law

The City Council has passed an amendment to the heating oil tax ordinance and the new effective date will be January 1, 2023. Please be sure that you do not inadvertently pass the amount of the new tax along to your customers this year.

If you have any questions about the heating oil tax or the delay you may contact Christine Bunch, Office of Sustainability and Environment, or (206) 615-1633.

Heating oil is the least efficient, most expensive, and most polluting form of home heating in Seattle. In order to reduce climate pollution, prevent soil and groundwater contamination, and improve air quality, Seattle has passed a law to help phase out oil heat by 2028. We estimate that between 15,000 and 18,000 households heat with oil and converting them to Seattle's clean electricity will reduce our climate pollution by the same amount as taking 90,000 cars off the road for an entire year. 


  • Starting January 1, 2023, heating oil sold in Seattle is subject to a tax of around 24 cents per gallon. This tax is imposed on the heating oil service provider. Should the oil service provider pass this tax on to their residential customers, the cost will likely mean an increase of an average $118 annually ($9.83/month). This cost is based on an average household consuming 500 gallons of oil per year.
  • The sale of biodiesel is exempt from the tax. Oil service providers will be taxed only on the portion of product sold that is diesel. Heating oil customers are encouraged to discuss biofuel options with their oil service provider and its compatibility with their heating equipment.
  • The revenue from the oil tax will be used to help pay for low income households switch from oil to an energy-efficient electric heat pump. Households that are not income qualified will also have access to rebates to help offset the cost of switching to a heat pump.
  • Some revenue from the oil tax will support oil service providers with workforce development and business consulting services to support the transition to clean energy technologies.
  • By December 31, 2028, owners with active oil tanks may be required to upgrade their tank to a code-compliant tank in order to prevent leaks or otherwise decommission their tank (fill in place or remove). Underground oil tanks rust, erode, and develop leaks that can contaminate the soil and groundwater. While there is no requirement now to replace a tank with a new tank, it is possible that a future Seattle Fire Code may require a replacement. Note: Existing Seattle Fire Code already specifies tank decommissioning requirements should you switch heating fuels. 

Resources to help Seattle residents with oil heat

  • Oil Tax Reimbursement
    The City of Seattle will reimburse income-qualified households participating in the Utility Discount Program, up to $120/year. The reimbursement will be provided annually either on the customer's Seattle City Light account directly, or by check.

  • No Cost Heat Pumps
    Revenues from the oil tax will help pay for conversions from oil heat to electric heat pumps for approximately 1,000 income-qualified households. This includes decommissioning the oil tank and removal of the old oil furnace.

  • Heat Pumps for Renters
    If a renter meets the income qualification, the City will work with the landlord for permission to complete the upgrade and in return, the landlord will agree to a rental covenant to prevent rent increases for 3 years.

  • Utility Discount Program
    This program is available to any income qualified household - not just those with oil heat. By switching from oil to electric heat means that electric heating costs will be discounted by 60%. Participants also receive a 50% discount on water and sewer costs. For information, call 206-684-3417 or go to

  • Oil Tank Leak Insurance and Loans/Grants
    The State of Washington Pollution Liability Insurance Agency offers a free oil tank leak insurance program that covers up to $60,000 in clean-up costs for those registered for the program. For homeowners not already registered, a new loan and grant program is available to pay for leak clean-up costs. More information is available at
  • Rebates
    Households have access to a $1,500 rebate when converting from oil to a qualified heat pump system. Seattle households must use a participating contractor listed on the rebate web site and install eligible equipment. The rebate is instantly applied at time of invoice by the contractor.    
  • Financing options
    Many lending institutions provide financing for energy-efficient upgrades, including electric heat pumps, weatherization, and more. Two non-profit lending partners offer these loans as well as the opportunity to pay back the loan on your Seattle City Light bill. Contact Craft3 or Puget Sound Cooperative Credit Union for more information.