I would agree that this song is about the increasing population of destitute persons in major metro areas, or anywhere, for that matter. The imagery in the song is good because you can see a homeless person huddled around a fire in the dead of night. However, it may also be about the confessions of a serial arsonist. This arsonist would probably be a homeless person who is either mentally unstable or has become so incensed at their situation that they have taken it upon themselves to place those with privilege out on the streets as well, by burning down there homes. Or offices or warehouses or what have you. The part about 'a funeral pyre,' 'shelter is a privilege of the sane and competent...' and "feels so good to watch it burn' are what make me get the impression this could also be about an arsonist.

I think this song is an abrupt comment on the status of living conditions for the impoverished in Los Angeles (though it can be seen in any major city).

In a quick sum up, the kerosene is first used, quite practically, as a cheap fuel to keep the oil drum fires burning for those without shelter. Alone, one would have plenty of time to contemplate their state of affairs and understand just how little is being done to help them out. In response to this, the kerosene becomes something quite different. A tool (perhaps the only tool they have) to fight against what has left them ostracized and marginalized for so long - 'I'm alone to watch it burn' becomes 'feels so good to watch it burn.' It's so easy to forget the powerless when they are swept from view and ignored. People don't want to see what's not pretty. Well open your eyes.