Question: I have heard that benzene is a dangerous chemical for humans; it causes cancer and so it's use is restricted/regulated. But many organic compounds that we use contain benzene in some form such as oils, foods, even medicines (paracetomol). So is benzene really harmful to people's health?

Answer: 
As Ivan Neretin commented, parts of a compound can never dictate its own properties to the entire molecule's properties. Additionally benzene is not a very effective functional group by itself.

In short, a restricted use is only applied when that certain chemical is exposed by itself. In paracetamol or any other thing including benzene, you will not see any benzene vapor emanating from them or something. It would also be meaningful if benzene containing compounds degradation products included benzene, like in environmental degradation of chlorobenzenes, though this is not a usual case as I see.
First let us make clear that the products you mentioned do not contain benzene. Likely you intended that plenty of products are aromatic compounds and, as such, contain at least a phenyl ring (or contain at least a benzene-like motif, for those less familiar with chemical nomenclature).

After reading the following, that gives some anecdotal notes as well, it will be clear that the presence of a specific part of a molecule does not necessarily dictates its properties (toxicological in the specific discussion) to the whole. 

Translated from my old university notes:

> 
> .... many aromatic compounds are carcinogenic. After the London fire,
>  a law imposing the maintenance of chimneys was promulgated. As a
>  result it was noted that sweeper kids were at high risk of developing
>  scrotum cancer. This was lately connected to benzo[a]pyrene present in
>  the soot, and clearly established in the 1900s.
> 
> 
> Benzo[c]anthracene is carcinogenic as well, and *benzene* is among the
>  most powerful agents inducing leukemia. 
> 
> 
> In general strong carcinogens are strong electrophiles, such as
>  alkylants. On the contrary, benzene is electron rich. 
> 
> 
> Again in England, around 1960, a kind of plague was causing the mass
>  death of turkeys due to leaver cancer. It was established that as due
>  to to a toxin present in the feeds that, once metabolized, gave
>  epoxides as strong electrophiles.
> 
> 
> A link to aromatic carcinogenic properties was then made and
>  established. Rather than aromatic themselves, the real carcinogens are
>  their epoxides formed during metabolism. They act as substrate for the
>  nucleophilic attack by DNA bases as we will see in......
> 
> 
> 

Anything altering the stability or geometry of the metabolite epoxides will therefore modulate their reacivity and in turn the hazard posed by that specific aromatic compound.

This is also the case for [PAH](https://en.m.wikipedia.org/wiki/Polycyclic_aromatic_hydrocarbon) were, at least, a particular structure (*bay*) is linked to strong carcinogenicity. 

Edit. As this answer received a comment pointing to the fact that not all aromatics are carcinogenic I invite you to consider that the above

* *many aromatics* does not mean that all aromatic compounds are carcinogenic
* *anything altering....* means that each molecule must be considered as a whole. Functionalisation of benzene by a methyl group leads to toluene, for instance. The latter does not qualify as carcinogenic and should replace benzene whenever possible
* PAH is of course a subset of arenes. Among PAHs, again, not all compounds are carcinogens. However, in this case, a specific feature regarding the shape rather generally point to carcinogenicity (see link).

*yes benzene is very harmful to human health*