Drinking straight Pygmy Oil will give you a 10 min. buff and reduce your character's size a small amount. This effect is stackable and further applications continue to shrink your character. At any random time your character will transform into a female voodoo masked Gnome.
There seems to be a gag or a bug where if you defeat Mal'Ganis in Culling of Stratholme while under the effcts of the Pygmy Oil, your character could change from a female voodoo gnome into a female human.
Pygmy Oil can stack with Baby Spice to make your character smaller than most Critter.