Hey good timing. I was just playing around with it and I decided that the handheld flamethrower really doesn't have a problem with spending too much oil. It is only the turrets which should be brought up to match. It's really the steel that's the issue with flamethrower ammo.
I have also changed my mind about the flame damage balance. I edited my copy of the mod to bring the ground fire damage back down to its vanilla value, and I prefer that. It is still very easy to kill anything that spends any significant amount of time in fire, but now it's a matter of making them stay in the fire for any length of time. It's not difficult, but it is no longer an instant kill.