It is a gray canister carrying a concentrated and highly-flammable liquid, and is used as ammunition for the flamer and other fire-based weapons.
Though flamer fuel is quite common, very few enemies carry flamers, though sometimes raiders use them. Therefore, flamer fuel is mostly found in ammunition boxes scattered throughout the Wasteland or at shops, where it can be found in moderate quantities (usually around 74). The Mister Handy and Mister Gutsy robot models also drop large amounts of flamer fuel when destroyed. A massive amount of the ammunition can be found in the Franklin Metro utility, in the containers near where the Burnmaster is found.
With the Scrounger perk, availability is dramatically increased. With 10 Luck, ammunition boxes will virtually never contain less than 100 units of fuel, and often will contain as much as 130.
The actual "loose" ammunition canisters, as seen in the picture, are mounted on either side of the flamer backpack or the sides of the heavy incinerator.
While most fuels were depleted during the Resource Wars, it would still be possible to make flamethrower fuel in the post-War conditions. As seen with the flamer's short and wide spread, the fuel used is likely a form of vegetable oil and could even be mixed with napalm, a substance that can also be made even without conventional petrol.