Lantern Fuel is a container of kerosene fuel for the Storm Lantern. It can also be used as an optional accelerant for starting fires or an ingredient for crafting a Torch.
Unlike the Jerry Can, when the container is emptied, it is spontaneously removed from the player's inventory and spontaneously generated when harvesting a storm lantern or cooking fish when no Jerry Can is in the player's inventory.
Jerry Cans are noticeably more efficient per kilogram than Lantern Fuel, weighing only 0.4 kg per 0.5 liters collected, while Lantern Fuel weighs 0.5 kg per 0.5 liters collected, the 0.1kg is a static addition, with even 0.04l still weighing 0.14kg. As such fully depleting a fuel package by refueling a lantern with it, decreases the weight in backpack by 0.10kg, presumably by throwing away the packaging.
Refueling a lantern with both a Jerry Can and Lantern Fuel in the player's inventory will use the Jerry Can first. Therefore it is best to drop the Jerry Can before refueling so the Lantern Fuel is used first. It is also better to use up multiple emptier packages than one full one.