I am baffled by part of the answer brought by Rabbi Yehoshua Pfeffer in article of 13 Kislev 5774 entitled Using Inedible Oil for Chanukah. He brings Gemorrah Brachos 35 b as a source for his conclusion. I fail to see how that sugya reflects at all on question of proper oils for Chanukah – which is clearly not the subject under discussion (the question is more as to where one can find a case where it is appropriate to make any brocha on consuming olive oil). 02 537-3026
The idea of the source mentioned is to show that in the eyes of the Sages the concept of “edible” oil means using the oil as a dip, and that to drink oil is damaging. Meaning, the Sages themselves appreciated that drinking oil is damaging to the body, and this was not of course a reason to disqualify the relevant oil for candle lighting, or to render it less mehudar.
For use as a dip, it stands to reason that the olive oil marketed for lighting is not damaging to the body – and it does not appear that the olive oil they had was of better quality.