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.
It is generally accepted that formation of diolepoxide-derived DNA adducts such as ones depicted in following [Figure1](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3812823/bin/nihms68761f2.jpg) is the principal metabolic activation pathway leading to cancer initiation in mammals (Courtesy of <https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3812823/>). 

![Figure1](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3812823/bin/nihms68761f2.jpg)

Polycyclic aromatic hydrocarbons (PAHs) are a class of environmental contaminants ([Figure2](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3812823/bin/nihms68761f1.jpg)) that has long been suspected for genotoxicity, metabolism and metabolic activation, DNA adduct formation, mutagenesis, and carcinogenesis. Although, PAHs are relatively non-reactive chemicals toward biological macromolecules under physiological conditions, upon entering the body, our cellular defense system attempts to “remove” these foreign substances by metabolism, which is principally done in our liver, mainly catalyzed by the cytochrome P450 enzymes. Upon metabolism, most PAHs, with multiple hydroxyl groups, become more polar and water-soluble to be excreted out of the body. However, metabolism of some PAHs generates certain reactive intermediates (see benzo[a]pyrene; [Figure 1]) that are capable of forming damaging covalent adducts with nucleic acids (*e.g.*, free $\ce{DNA-NH2}$ groups), eventually leading to genotoxicity and cancer.

![Figure2](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3812823/bin/nihms68761f1.jpg)