Anything oil based can easily result in sunburn (as we approach summer!) so keep this in mind when you apply/where you apply it on the body. If you're putting it on her back, and she's turned out, you could end up with a horse covered in sunburn blisters. If you're planning on riding, this may not work out so well!
"If you think nobody cares about you, try missing a couple payments..."
If she is touchy, I would suggest PLAIN mineral oil over Baby Oil with the perfume in it. Baby Oil is MOSTLY mineral oil anyway, so just go with the mineral oil and skip the irritating additives.
I used baby oil for greasing tail bones, had one horse react BADLY. He got sores and lost half his tail hair from that!! I felt very badly, and went to mineral oil after that, which he had no reaction to. I expect it was the perfume or acetate in the baby oil that caused his reaction. Never had previous horses react badly to baby oil, but sure learned from that!!
Only mineral oil for my horses now.
Have to second the chance of sunburning your horse with any oil, vasaline, Bag Balm type ointments, MTG, which are greasy so horse burns right thru them.
Dry, itchy skin is usually helped with feed, maybe Flax would help get her skin oily again. Or use of some other oil in the feed. We feed soybean meal, have great skin, hair, hooves on our horses.
Also might be an effect from whatever shampoo you wash her with, or lack of grooming often, especially if she has been blanketed over winter. Horse skin will get flaky to grow new skin. If old skin is not groomed often, or deeply, the horse CAN appear flaky and static in the air makes flakes difficult to remove from hair.
Yes. Skin gets the most improvement when you work on it from the inside out. Adding fat (particularly something with Omega 3s) somehow to her diet SHOULD help a lot. There are a lot of other things to try, other than the Platinum Performance, that are a whole lot more cost effective and work just as well (if not better, as I know a lot of horses who don't find the PP palatable).
Worms! Worms make them itchy on their tail/rump area. There has been a rash of resistant pinworms in my area (not sure where you're from, OP), that have been super tough to get rid of, and makes them itch their tails and rumps like crazy.
Have your vet check out the real cause and treat that before you slather on grocery store combos! Bacterial causes need to be treated differently than fungal causes which need to be treated differently than immune-mediated causes. It could be that a simple round of antibiotics, or an anti-fungal cream, or some dex could fix your horse right up without having to try everything in your tack box arsenal first.
miss mare has terrible sensitive, flaky, dandruffy skin and severe allergies(or did, not much now=]). i add baby oil to her wash when i give her a bath. i also recently added cocosoya oil to her feed, which has been a great improvement.
of course, nothing replaces thorough grooming, curry curry curry and use a microfiber cloth to get all the smaller particles you cant see up. it really helps!
(mare is on platinum performance, but has been for years, so thats why i didnt mention it as a solution)