I read that petroleum based ointments should not be used for dry nose conditions because the petroleum vapors have a negative effect on lungs. True? Thk

Partially correct. It is rare but exposure to petroleum based ointments applied to the inside of the nose can cause injury to the lungs. If seen, typically from chronic exposure and due to aspiration of the jelly into the lungs. There are products available over the counter that are water based and would recommend changing to one of them.
Petroleum. Why would you want to use a petro product anyway? The product is from oil. Think of the BP oil well in the gulf. The animals that got covered in petroleum were sick. My mother used vasoline on me as a child. No one thought anything of it. Now we know better. We are exposed to toxins all the time but we do not need to put them on us. Get a natural moisturizer. Hope this helps.