The Mishnah (8:2) teaches that one is allowed to consume shemittah produce in the ways such produce is normally consumed. This includes eating, drinking and sicha (rubbing it one one's skin). In the case of sicha, that would specifically be referring to oil. The Mishnah continues that sicha is also a permitted usage for terumah and maaser sheni oil. Nevertheless, shemittah oil is more lenient since one can use it for hadlakat ner (fueling a lamp). We shall try to understand the last statement.
The Mishnah Rishona explains that burning shmittah oil is a permissible use because the Torah allows any human need to be satisfied with shemittah produce, as long as its benefit is derived as it is consumed (similar to eating). How then does shemittah differ from terumah and maaser sheni?
The Bartenura explains that shemittah is more lenient because with terumah oil, only if the oil was tameh could one light it. Regarding maaser sheni oil, it is only if it is tahor that one can burn it. With regards to maaser sheni this is based on the pasuk related to vidui maaser, where on declares that "I did not burn it when it was tameh", implying one can burn the oil if it was tahor. This is also the position of the Rash.
The Tosfot R' Akiva Eiger however finds the Bartenura difficult. One is only allowed to "eat" maaser sheni. Eating also includes drink and sicha, but not burning. He suggests that the pasuk cited by the Bartenura however is necessary to teach that one is not allowed to burn maaser sheni oil [even]{.underline} if it is tameh -- unlike terumah. Indeed, the Mishnah Rishona cites Rashi that explains the pasuk in this way and cites the Rambam who rules that one cannot burn maaser sheni oil whether it is tameh or tahor (see also Shenot Eliyahu).
The Tifferet Yisrael (Boaz 8:2) however suggests that we have misunderstood the Bartenura. The Bartenura would agree that ordinarily one is not allow to burn maaser sheni oil at all. The pasuk cited by the Bartenura however is referring to the time of biur -- after the third and sixth year when the maaserot must be removed. The Rambam explains that they are removed and burnt. Consequently, it is then that maaser sheni oil can be burnt, but only if it is tahor.
When the Yerushalmi however discusses this Mishnah, it mentions the difference between burning shemittah and terumah oil without mentioning maaser sheni. The Gemara continues that even though one is allowed rub shemittah oil on one's skin, they cannot do so in a bathhouse since it is degrading to kodshim (something that is holy). For the same reason one is not allowed to use (tameh) oil of terumah in a shul or beit midrash. The last statement is difficult considering that the Mishnah in Terumot (11:5) explains that using tameh terumah oil for lighting in a shul or beit midrash is permitted.
The Pnei Moshe suggests the Gemara is referring to rubbing terumah on one's skin in shul that is prohibited. Doing so in such a public manner is degrading to kodshim. The Rash Sirilio however suggests that it is referring to a case where one accepted to donate oil to the shul's lighting. Using terumah oil would appear to be paying off his debt with terumah which is prohibited just like it is with shemittah produce. The Mahara Fulda however explains that the case is where the only lighting would be from the terumah oil and would then be used for all manner of uses, which would be degrading. It is only permitted to use the terumah oil if there is other lighting in the building.
R' Chaim in his commentary on the Yerushalmi however provides a different answer. The Gemara reads beit knesset and beit midrash. He suggests that it was originally written using the acronyms בב״כ ובב״מ and wrongly assumed by copier to mean those two locations. Instead, the acronyms should be understood as, in the beit ha'kisseh and in the beit ha'merchatz, meaning the bathhouse and toilet. Consequently, the Gemara is teaching that terumah oil shares that same law as shemittah oil; while they can be used for sicha, doing so in certain locations would be disgraceful to these holy items and therefore prohibited. }}}
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