Not sure about full propagation. Theoretically it could be put into the same pass as the liquids though.
Maybe have it act like an contrabaryonic liquid (it falls away from gravity effects instead of towards them but gets blown around normally) and transforms itself into smoke and heat (damage) when it makes contact with fuel sources and atmosphere... blobs?
Has fuel? Good
Fuel is at combustion temperature? Okay, check for atmo
Has Atmo? Okay, start fire
Has Fire? Okay, make smoke
Still has Fuel? Okay, check for atmo
No Has Atmo? Okay, run half-life, turn fire into heat over valve time
We has Atmo Now? Okay, check fuel temperature
Has Lots of Hot Fuel? Okay, make lots of fire
Has no room for lots of fire? Okay, spill fire everywhere!
Fire is on peoples? Okay, peoples is fuel, add heat until they make more fire