Rinpoche gave the following advice on fire pujas.
The secret Mahayana Vajrayana teachings include the "offering burning" practice (Tibetan: jin.sek). Every item offered in burning pujas is good for some purpose. There are various substances that are offered to the deity during the fire puja. Each substance has potential power to affect your life. You offer grains to pacify sicknesses and to give strength; for long life you offer crepe grass; to purify pollutions you offer kusha grass; and for wealth you offer butter. Like this, all the substances offered are to actualize different potentials and types of success.
Normally, the burning pujas are offered at the end of great nearing retreats, three-year retreats, or short retreats of the enlightened being deities. These retreats are done with mantra recitation that brings you closer to the deity. The burning puja is offered to restore parts of the practice that were left out, or mantras that have been incorrectly recited or mixed up, performed with unclear concentration. It also generally purifies defilements and negative karma.
In general, there are four types of burning puja:
1. Pacifying. This is to pacify sicknesses, spirit harms, and to purify negative karma and defilements.
2. Increasing. This prolongs life, increases merit, wealth, realizations, and wisdom attainments.
3. Controlling. This gives you control over sentient beings so that they will listen to you and you can bring them into the right path, not only bringing them temporal happiness but also ultimate happiness, total liberation from suffering and its causes, to great liberation, full enlightenment, and peerless happiness. Having control over them is in order to benefit them. Also, by having control over evil beings, they stop continuously harming others and will listen to you. By having control over wealth, you can use it to benefit other beings and the teachings of the Buddha, as well as to create conducive conditions for your own practice.
4. Wrathful. This is used when other methods don't work and only wrathful action can benefit. If evil beings are giving harm to sentient beings and the teachings of Buddha, wrathful actions can stop them. If you have realizations and power, it is possible to split the consciousness from that being and transfer it to a pure land, where there is not even the word "suffering," as in suffering of rebirth, old age, sickness, relationship problems, AIDS, cancer, tsunamis, and so forth.
Of course, these wrathful fire pujas cannot be done without a motivation of strong compassion, by one living in pure morality and tantric samaya. Anyone who doesn't have pure morality cannot have pure tantric samaya. Morality is based on the fundamental virtues: abstaining from killing, stealing, telling lies, slander, hurting with words, heresy, etc. This is the very first Dharma to practice—abstinence from these negative actions that harm oneself and others. Living in morality brings happiness to oneself and others—not only temporal happiness but also liberation from suffering and all its causes.
Wrathful action needs a very stable divine pride and clarity of oneself as a deity. It cannot be done in the aspect of an ordinary being—your ordinary self is viewed as an enlightened being, a deity; the pure "I" labelled on the pure aggregates is actualized by purifying the impure aggregates and the impure "I."
Then, of course, if you have the realization of the clear light and illusory body that is very powerful. The most qualified being is the fully enlightened one, who has all the qualities.
So, offering the fire burning puja is done for these reasons.