Though, there are no side effects of lemongrass oil. One still needs to follow certain guidelines while using essential oil. Never use concentrated essential oil on your skin. Mix it with a cream, gel or a light carrier oil, then only use it. If using it as a bug repellent, then mix it with a cream or oil and then use it, or spray few drops on your clothes to repel bugs. I mix lemongrass oil with aloe gel, and use it as a natural insect repellent.