Necessary to light Cigarettes. Can also light oil.
In-Game Tooltip
"Create fire in your hand. Probably would have gotten you burned at the stake in the middle ages."
The Cigarette Lighter is an item obtainable through trash cans or through a Shopkeeper for a cheap price. It allows you to use cigarettes (which is rarely useful), and allows oil on the ground to be ignited, which can harm characters and set fire to wooden buildings. It can also be used to light Barbecues in order to make Hot Fud.