You need to measure the magnetic permeability of the powder while avoiding the dielectric constant of the kerosene.
An LC oscillator has a frequency set by the values of inductance and capacitance.
http://en.wikipedia.org/wiki/LC_oscillator
http://en.wikipedia.org/wiki/Electronic_oscillator
The capacitance is controlled by the dielectric constant. The inductance is changed by the presence of magnetic particles.
http://en.wikipedia.org/wiki/Ferrite_core
An inductance can only be measured to a few percent but the frequency of an RF oscillator can be measured to at least 6 digits when referenced to a crystal oscillator. An LC network that sets the frequency of an oscillator can operate at 1MHz without problems.
The critical thing here is that the size of the magnetic particles that make up the magnetic core must be smaller than the skin depth in that material at that frequency. 6um or smaller is well into the MHz range.
http://en.wikipedia.org/wiki/Skin_effect
Unfortunately kerosene has a dielectric constant of about 1.8 and probably varies with temperature. Air and space have constants of 1.00 while water is about 80. So the capacitance of the LC circuit must be independent of the kerosene temperature and composition. That will require a temperature stable reference capacitance, such as silver mica. Because the inductor will be immersed in the dielectric there will be some capacitance between the end terminals of the inductor that will be added to the fixed reference capacitor. That could be a problem.
It would be possible to build two identical oscillators, one with clean kerosene, the other with kerosene-powder mix. The temperature of the two could be equilibrated. The frequency difference would then be a strong function of magnetic particle content.
A frequency difference can be generated by using an RF mixer (non-linear) or by a simple exclusive OR gate to generate the difference or beat frequency. That system is usually called a Beat Frequency Oscillator, BFO.
http://en.wikipedia.org/wiki/Beat_frequency
http://www.geotech1.com/pages/metdet/info/bfotheory/bfo.pdf
You will need to design an enclosed inductor in a flow cell that does not precipitate or clog with the powder. Avoid magnetic materials or you will have powder separation problems. Two of those cells in close thermal contact then make the kerosene-powder sensor as part of two oscillators.