I have used with Dielectric which is cost effective, high MRR and good surface finish, regarding kerosene I have no experience but literature suggests initial stages scholars were used but nowadays its shifted to deionized water,
Even I have met with people who were using tap water /distilled water directly for this application with wire EDM (Sprintcut)
You can check the literature attached which will give you much clear idea for both the applications
Since the kerosene is an hydrocarbon oil, it will liberate more toxic gases. Hence it is better to use deionized water with environmental consideration.