I agree it is probably an allergic reaction to something.
Possibly food, they can get allergies at any time, so even if he was allright on it before it may still be the cause.
Fleas are a big allergy problem in dogs too.
Dry skin also, which olive oil or safflower oil may help, but you may not see any improvement until a month or maybe longer, as it will have to heel fromt he inside out when dealing w/ food issues/treatments.

Just an FYI: dry skin is not very common in the summer months.

I probably would not put the bitter aplle right on the sore spots as it may just make the problem worse.

bathing often may make it worse, if you know the condition & have the right shampoo it may make it better though. A vet can tell you what you should use.

The best bet would be to take him to a vet. Or at the very least at first try him on a better food, good lamb & rice formulas (w/ no corn) is good for skin problems, and continue to add the extra oil to his food.

good luck