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It is seen in the missions Misappropriation (where Eddie Pulaski uses Dippo lighter fluid for the barbecue in the cutscene), The Master and the Molotov, Wrong is Right and It's War. It is likely a parody of the famous lighter brand Zippo.
In GTA V, the Dippo lighter was first seen in a pre-release artwork showing Trevor Philips holding a Jerry Can with a lit Dippo in his right hand. However, the Dippo lighter does not appear as a weapon in the game, although it can be found on the table inside Floyd's Apartment and also seen being used by Michael in the final cutscene of the game if the player chooses option C.
The most notable appearance using any lighter within gameplay is when using a Bong, although the lighter used for a bong is a blue, cheap, disposable, pocket sized lighter such as a Bic; This may be due to the fact that in real life, Zippo lighters greatly affect the taste of a bong, also, it would be hard to position the flame with a Zippo.