Breaking Down The Cost of Oil Tank Replacement

D.P. Taylor
Written by D.P. Taylor
Updated June 24, 2022
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Photo: Portra / Getty Images

Highlights

  • The average cost of replacing an oil tank is $1,900, with a typical range of $800 to $3,800.

  • It’s less expensive to replace indoor oil tanks than underground tanks.

  • The major cost factors are labor, size of the oil tank, and type of installation.

  • You can save money by getting an oil tank installed indoors or buying a smaller tank.

  • Oil tank replacement is best left to the pros and should be considered every 15 years.

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If your home uses oil heat, you have an oil tank somewhere on your property to store the oil. Oil tanks only last 10 to 15 years, so you will have to replace them at some point.

The average cost of an oil tank replacement is $1,900. The typical range is anywhere from $800 to $3,800 depending on the size of the tank and whether you get an indoor, above-ground, or underground installation.

National Average CostMinimum CostMaximum Cost
$1,900$500$4,500

How Much Does It Cost to Replace an Oil Tank by Type?

Tank TypeCost
Above Ground Outdoor$1,500 – $3,000
Underground$2,000 – $4,500
Above Ground Indoor$800 – $2,500

Above Ground Outdoor

An outdoor above-ground oil tank is the mid-range option in terms of cost. The cost is between $1,500 and $3,000. You will have to do extras like installing a concrete base, but you won't have to dig a hole for the oil tank to live in.

Above Ground Indoor

Starting at just $800, indoor tank removal is your least-expensive option because you won't have to create an access hole or build a concrete slab since your basement's floor should suffice.

Underground

An underground tank is the most expensive option because it can cost an extra $1,000 to $2,000 to create an access hole for the tank.

Oil Tank Replacement Cost Breakdown

Heating fuel oil tank beside exterior wall
Photo: Kevin Brine / Adobe Stock

The factors affecting the price of an oil tank replacement include the size of the oil tank and the type of installation.

Labor

Roughly $500 to $1,200 of your budget will go toward labor. You’ll pay in the lower range if installing the oil tank in the basement since that doesn’t require much labor.

Size of the Oil Tank

Oil tanks range from around 220 to 330 gallons, and the larger the oil tank you choose, the more it will cost.

Type of Installation

If you get an indoor installation, you'll pay on the lower end since you won't have to build access holes or a concrete slab. An underground installation that requires digging will cost at the highest end. An above-ground option is a mid-range solution.

Fuel Filters

A smaller factor is whether you need to replace the fuel filters and fuel fill pipe, which will add about $100 to $150 to the price.

Oil Tank Removal Costs

Most homeowners pay between $400 and $3,000 for all oil tank removals before factoring in the replacement costs. Expect to pay an average of $1,700 for oil tank removal—as long as there isn't an environmental issue lurking under the surface of your soil. A tank buried in the ground could reach as high as $3,000.

Additional Cost Factors to Replacing an Oil Tank

Permits

Most cities require a permit to replace your oil tank. Obtain the proper documents or have your pro help you. Permits average $1,330 nationally but will vary greatly depending on where you live and your specific project.

Cost to Pump Reusable Oil

Have your contractor extract the reusable oil—if any—from your tank to avoid letting costly gallons go to waste. Pumping this oil requires special equipment to extract, filter, and reuse, so you may incur extra costs. Other contractors might want to keep it and reimburse you by discounting your bill.

Oil Sludge Disposal

Similar to oil tank removal fees, your contractor will likely price waste disposal by pound or ounce. While end rates vary by town and city, you might pay between $10 and $70, including service fees to remove and dispose of sludge properly.

Custom Fuel Lines

If you live in a colder climate, for example, you might opt for insulated fuel lines to keep your fuel from freezing. Your contractor might recommend a different supply line depending on your climate and location.

Cost to Install an Oil Tank Yourself

Since the cost of labor for this project generally is $500 to $1,200, you can save considerably by doing the work yourself. However, this is not advisable. An oil tank installation is a big job, even if you're just putting it in your basement. This project involves flammable materials best left to the professionals.

Before you consider doing it yourself, contact a local oil removal company for a consultation and a quote.

How To Save On Oil Tank Replacement

If you’re trying to figure out how to cut costs without doing the job yourself, there are a few things you can do.

  1. Install the tank indoors: While you may have originally intended to install the oil tank outside underground or above ground, basement installs are more affordable because you won't have to dig a hole or install a concrete slab.

  2. Get a smaller tank: In this case, bigger tanks mean more money. If you can swing it, opt for a smaller tank that’s easier to install.

  3. Be flexible regarding access: If you need to create an access hole for your tank, consider cutting into the wall of your home rather than into the foundation, which could save you around $1,000.

Oil Tank Replacement Questions and Answers

How do I know if my oil tank needs to be replaced?

Signs that it's time for an oil tank replacement include:

  • Lack of heat

  • Signs of leaks and wet spots

  • Evidence of corrosion

  • Uneven appearance

  • Age (you should replace all oil tanks after 15 years)

Can I install my own oil tank?

DIY install is possible but not recommended. This is because it is a difficult installation, and you’ll need to meet legal requirements for safety, like secondary containment within a fire-resistant chamber in a specific part of the building.

How long do oil tanks last in the basement?

While oil tanks generally should be replaced every 10 to 15 years, oil tanks in the basement can last up to 25 years because they are less exposed to the elements and won’t corrode as fast.

How much does it cost to remove an oil tank?

Depending on the size of your tank and how hard it is to access, you could spend anywhere from $400 to $3,000 including labor. 

How often should I replace my oil tank?

Most home heating oil tanks last between 15 and 30 years. If your oil tank has hit its 15-year mark and is leaking or rusting, you should consider replacement.

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