It can be dry skin or balanitis. It can be due to friction rub or balanitis. Balanitis is an inflammation of the glans (the rounded head) of the penis and may be related to yeast infection or poor hygiene. What you need to do is consult a dermatologist and get a KOH examination of the skin scrapings of the penis and a biopsy of small skin sample done if the symptoms persist. KOH examination of the area will clarify whether it is balanitis due to fungal infection or not.
Also use water based lubricants during sex.
It is very difficult to precisely confirm a diagnosis without examination and investigations and the answer is based on the medical information provided. For exact diagnosis, you are requested to consult your doctor. I sincerely hope that helps. Take care and please do keep me posted on how you are doing.
http://imgur.com/5L1rpnA - Heres a picture