Vegetable oil is typically used as an ingredient in food or as a cooking utility. It is flammable, and thus has some potential as a firestarting aid or explosive ingredient. Consumption of large quantities of undiluted Vegetable Oil is not recommended.
To use Vegetable Oil, either click on it in your inventory and choose the "Use" context button OR look at a dropped bottle of Vegetable Oil, press "E", and choose the "Use" context button. This will make your character drink the entire bottle of Vegetable Oil.
Contraband Status Edit
Because Vegetable Oil is not found in UU-issued rations, it is considered by the Combine to be low-level contraband.