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When I was at the "Israel night" my friend Rabbi Warren Cinamon, a Rebbi in Yeshivas Bnei Torah, asked me about the use of שמן שריפה for נר חנוכה. The Rambam [on the heels of the Yerushalmi] ruled that one may use it only if he has no other oil. What is the reason for this? If it is valid oil it should work even if he has other oil and if it is not then it shouldn't work even if he doesn't....

A question many may have: What is שמן שריפה?

Here is part of what I found on the topic....