When load on transformer increases current flowing the transformer windings increases. Heat generated by the rise in the current will be dissipated in to the transformer oil. Heated transformer oil becomes less denser compared to the normal transformer oil and moves up in to the conservator. This heat will be dissipated in to the atmosphere from hot transformer oil.
When load on transformer increases, transformer breather breathes air in. Air contains moisture when come in contact with the oil will affect the purity of the transformer oil. Moisture and impurity level in the transformer oil increases results in the damage of insulation property of the transformer oil.
To avoid entry of moisture air in to the transformer silica gel crystals are used. Silica gel will absorb the moisture in the air and allows dry air in to the transformer. Silica gel will be blue when they are installed or dry. When the crystals absorb the moisture they turn to pink color.
Thus silica gel protects the insulation strength of the transformer oil by absorbing the moist air entering in to the transformer