The jerry can is a red gasoline container with a grey and yellow cap. It is located inside the shed in the gardening club, along with the shovel and the axe. The gasoline is lime yellow when poured in a bucket.
The jerry can's contents can be emptied into a bucket. That bucket can then be poured onto or splashed onto someone else. They will comment that it smells like gasoline and stand in place for ten seconds before running to the shower room. You can walk up to a student doused in gasoline while holding a candle, or place a candle near the student on the floor as an alternative way to set them on fire.