A fuel pod was a large tank designed to hold extra fuel. They could be carried on the outside of starships, such as light freighters, for refueling of ships, such as starfighters, that had less fuel capacity.
Lothal Governor Arihnda Pryce chose to blow up a fuel pod in order to stop the fleeing Spectres rebel cell. The sacrifice of Kanan Jarrus, however, allowed the group to escape, while also resulting in the sidelining of the TIE/d "Defender" Multi-Role Starfighter program on the planet, earning Pryce the wrath of project head Grand Admiral Thrawn.