Not really sure what it would take, but considering how much I have used the oil slicks to save my *** in some dungeons, wouldn't it be great to be able to have that in throwable form? Heck, what if you could coat people in it, and make them into the human torch without the benefit of cosmic rays (That is to say, make them die in a fire).

I envision a grenade that spills oil everywhere, or a canister you can pour out. Maybe something in a clay pot, so that when you throw it, it shatters and suddenly you get petrol everywhere.

Edit: Another idea: Oil spells.

There's already Dwemer oil in the game, might be cool if you could place it on the ground and explode it.

Well, there are the slicks that you find on the floor, I'm sure that could be applied to an NPC.