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1- Activated Carbon Filters: I would tend towards adding an activated carbon based filter to the WASH kit. Aquatabs will do nothing beneficial for the oil contamination, but can still be used after oil removal for disinfection. Disinfection is still by far the most important water treatment step. Assuming gross contamination & any easily separable oil has been removed, the water could then be passed through an activated carbon filter prior to disinfection using the Aquatabs or a similar product. You could instead use a combined activated carbon plus membrane or ceramic filter that would take out the oil compounds and disinfect in a single unit (reducing the need for the Aquatabs) but a measurable disinfectant residual is often desirable.
2- Assuming you can distribute activated carbon filters, I would suggest: a) Firstly look at the raw water and don’t use it if you can see evidence of oil (any sheen on the surface of the water) b) If you are forced to use water where you can see oil, leave it to settle in a container and take the water from below the surface, disposing of the oil on top c) Pass the water through an activated carbon filter d) Smell the treated water if it still smells of oil (or otherwise strange) seek assistance e) Disinfect the treated water using Aquatabs as per the instructions f) Taste the disinfected water and if it still tastes of oil seek assistance
3- You may want to check the water for benzene, ethylbenzene, toluene, xylenes and VOCs (Volatile Organic Carbon).
Oil is a mixture of various compounds, many of which have very low solubility in water and can be removed by simple floatation separation (oil floats on water so ensure there is no abnormal sheen on the water). As one of the lightest fractions, petrol is the lowest molecular weight hence most soluble, so its compounds may be of greatest concern. WHO don’t set a guideline value for petroleum products as it is considered that one would mostly be able to taste or smell soluble aromatic hydrocarbons at lower concentrations than would be of health concern with short-term exposure. For this reason it would make sense to recommend that people do not drink water that smells or tastes of oil. WHO recommend a context specific risk assessment, this won’t be easy if you have multiple backyard refineries as there will be great variability in the pollution. There are some petroleum compounds that are given guideline values, for example benzene (0.01 mg/l - treatable with GAC or air stripping), ethylbenzene (0.3 mg/l - treatable by air stripping), toluene (0.7 mg/l - treatable with air stripping) & xylenes (0.5 mg/l treatable by GAC or air stripping). You’ll see from this that air stripping is the common theme. I am not however convinced that you would be able to set up a WASH kit with adequate system for air stripping, due to the likelihood of inadequate operation leading to contaminant carryover. An adequately designed activated carbon filter should be easier for end users to operate adequately.
4- For a short term emergency, if people can’t taste anything odd with the water then the direct risk from oil contamination is relatively low. The risk from inadequate disinfection would be much higher. Most of the issues around oil compounds are longer term carcinogenicity, hepatotoxicity, etc. I understand you would need either a high concentration, or very long exposure to have a significant risk of illness. This compares with a significant risk of illness from microbial contamination, hence disinfection and sanitation are the primary concerns.