Weapon on fire
Oil applied to a melee weapon and lit
A sword or other melee weapon that is alight with oil will stay lit for 5 rounds if simply held or moved with. Swinging the weapon, whether it hits or misses, reduces the lit time to 3 rounds due to oil being flung from the weapon or left behind after a strike with the weapon.
A creature struck with the weapon on fire takes weapon damage per the weapon table plus 1d6 fire damage. As examples, a cleaver on fire would deal 1d6 slashing + 1d6 fire damage, a knife on fire would deal 1d4 piercing +1d6 fire damage and a metal baton on fire would deal 1d6 bludgeoning +1d6 fire damage.
On creatures that fire damage ignores their damage reduction, damage reduction applies to the normal weapon damage but not to the fire damage. So, damage should be announced as separate amounts (i.e. 12 points of regular damage and 4 points of fire damage).
It is a full round action that provokes opportunity attacks to coat or recoat the weapon and light it. This is based on the d20 Modern Core Handbook, page 135, Table 5-2 Actions in Combat, for retrieving the stored oil and match (= move action, provokes), coating the weapon (use a piece of equipment = move action, no provoke) and lighting it (use a piece of equipment = move action, no provoke).
A creature struck with a weapon on fire cannot catch fire.