Answer: (A) Paraffin based insulating oil.
Transformer insulating oil consists of four major classes of organic compounds, namely, paraffin, naphtha, aromatics and olefins. Generally paraffin based and naphtha based insulating oil are used in transformer. Paraffin based insulating oil has faster deterioration rate than naphtha oil and the sludge of paraffin oil is not soluble, hence can obstruct the convectional flow of oil during cooling, but still in India this oil is hugely being used due to its easy availability and insolubility of sludge is somewhat overcome due to warm weather condition of India.