Mineral oil is generally effective as a transformer oil, but it has some serious disadvantages, of which the worst is its high flammability. If a transformer leaks mineral oil, it can easily start a fire. Fire codes often require that transformers inside buildings use a less flammable liquid, or the use of dry-type transformers with no liquid at all. Mineral oil is also an environmental contaminant, and its insulating properties are rapidly degraded by even small amounts of water.
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