When Ash launches a fireball, some flame will linger where you stand. If you morph to a character like Pummel Weed, the flames will alight your character and cause some damage. But you can use Deep Blue with the oil upgrade and shoot napalm.
As Ash, launch a fireball, then quickly morph to Deep Blue and start shooting oil. The oil will be in flames as you shoot it. You will not take damage from the flames because Deep Blue is of the Water element and Fire doesn't affect it.