A lot depends on whether this is fantasy oil or real medieval lamp oil. Actual unrefined lamp fuel was typically tallow (sheep fat) or fish or whale oil. All will sustain combustion if carefully lit, but if you throw a jar of flaming lamp oil it will probably just go out.However, D&D has relied on flaming oil for efficient troll control since shortly after Chainmail (in Chainmail we instead relied on flaming tar-daubed pigs). As far as damage is concerned, look at alchemist's fire level 1 (cost 20 gold):
area burst 1 within 10, +4 vs reflex for 1d6 fire, half on miss.
Giving it this much power would be very generous, since lamp oil costs much less and has other uses that alchemist's fire lacks (it provides light when used with a lamp, might provide a bonus to Thievery checks by lubricating a mechanism, and could even be used to make an area of floor slippery).
I would either allow lamp oil to function as alchemist's fire once, on a "cool improvisation" basis, or if someone wants to use it repeatedly I would make it single target, ranged 5, treat as improvised weapon basic ranged attack, 1d6 fire, no miss effect.
ncG1vNJzZmivp6x7prrWqKmlnF6kv6h706GpnpmUqHywwMeeqWato5rAbrLOq2SlmZ2lerC1y2aYZqmlmsC1tc6nZJ%2BnomKxrr%2BNa25vb2NpfA%3D%3D