AFUE is the abbreviation for Annual Fuel Utilization Efficiency ratio. AFUE is used to rate furnace efficiencies by dividing the ratio of heat output by heat input. This measurement describes how efficiently fuel, gas or oil is consumed to produce heat by a furnace. As the AFUE rate increases, the efficiency of your furnace also increases, lowering your fuel costs. Furnaces manufactured in the United States are required to have at least an 80% AFUE.