A favourite all-round fuel (4)
I believe the answer is:
peat
'fuel' is the definition.
(peat is a kind of fuel)
'a favourite all-round' is the wordplay.
'favourite' becomes 'pet' ('pet' can be a synonym of 'favourite').
'all round' indicates putting letters inside.
'a' going inside 'pet' is 'PEAT'.
(Other definitions for peat that I've seen before include "Fuel dug from bog" , "Fuel from marsh" , "Vegetable deposit used as fuel and fertiliser" , "Partially carbonised vegetable matter saturated with water" , "Partly carbonised vegetable matter, turf" .)