Hello Paul, Do you mean Peugeot 306? as a diesel 305 wouldn't care what you poured down its neck. All I know is that Kerosene is not a good lubricant,(home heating oil system fuel pumps in the boiler can sieze) And this could wreck the high pressure pump and thus metal fragments kill the injectors, also metal fragments can end up in fuel tank and the nightmare can add up to a written off vehicle.
This is a problem with modern day diesels and people read in the paper that old cooking oil from the local Indian will run their BMW X5 The Peugeot 305 would be a better bet!!