The 318ti is a gasoline powered car. With the exception of the 316g which is powered by natural gas all brands on the E36 chassis run on gasoline. I have heard my 318ti's M44 Engine runs best on 93 octane.

Gasoline is stored in a tank underneath the car and is pumped to the fuel rail by a fuel pump that physically sits in the gas tank. The fuel rail is pressurized to 40 PSI when the car key is turned to position 2, ie the position before attempting to crank the car. To achieve pressurization the fuel pump is run for 30 seconds. It takes far less than 30 seconds to pressurize the fuel delivery system, and any excess gas which is pumped to the rail during this time (or anytime the pump is running for that matter) is returned to the tank to maintain 40 PSI.

4 fuel injectors sit atop the fuel rail and inject fuel into the engine. The M44 is a "port injection" engine meaning fuel is sprayed into the intake manifold a brief distance away from the cylinder but not into the cylinder itself ("direct injection"). Fuel injectors are a core part of the Fuel Injection system.