Nanoparticles have attracted great attention in different fields as they show unique properties which can't be attained by conventional macroscopic materials. Low cost additives like nanoparticles play a vital role in modern lubricants. It improves the performance and life of machines by reducing frictional work, wear and prevents failure of its components. In the situations of high thermal loading and high heat flux nano fluids with stabilized nano particles emerge as a key for efficient heat transfer. Here a performance analysis was conducted on a hermetically sealed compressor, in a refrigeration system working with both conventional mineral oil lubricant and nanofluid containing Titanium dioxide nanoparticles as additive. Power consumption in both cases are studied. Compressor working with nanofluid as lubricant shows lower power consumption. Heat transfer rate was also found to be higher by the use of nanofluids. The viscosity of mineral oil and nanofluid were measured and are compared. From this study it was found that use of nanoparticles as additives is economical and aids in better performance compared to mineral oil lubricant.