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This seems to be contact dermatitis of scrotum. Do you shave there? I would suggest you not to apply after shave over the area. Also change your soap and detergent and see if it makes any difference.
After bathing, dry off well apply the tea trea oil to affected area, wear loose clothing.
please read the following information:
I believe you have a form of fungus that may or may not be Jock Itch.
The term "jock itch" typically describes an itchy rash in a man's groin. Although there are many causes of jock itch, this term has become synonymous with tinea cruris, a common fungal infection that affects the groin and inner thighs of men and woman. Tinea is the name of the fungus; cruris comes from the Latin word for leg.
Jock itch can develop when tight garments trap moisture and heat. This creates an environment in which fungi multiply and flourish. Athletes often get jock itch. It occurs more commonly in men, but can affect women as well. The jock itch fungus may cause a rash on the upper and inner thighs, the armpits, and the area just underneath the breasts Many people with tinea cruris also have athlete's foot. Athlete's foot is called tinea pedis.