Palmer managed just four laps of the Baku circuit on Saturday afternoon before he was down the Turn 2 escape road with his Renault on fire.
The marshals drowned his RS17 in fire retardant foam, preventing further damage.
With the yellows eventually lifted at Turn 2, the action heated up as did the track temperature – up to 59’C!
Daniil Kvyat set the early pace before losing out to Mercedes with Valtteri Bottas hitting the front with a 1:43.720.
Ferrari and Force India got involved in the tussle as did Williams while Lewis Hamilton climbed to fifth place. The Brit and his team-mate the only two inside the top ten running the soft Pirellis.
Friday’s pace-setter Max Verstappen was down in 15th place on the soft tyres, 2.7s down, while Daniel Ricciardo was three-tenths slower than his team-mate.
When Mercedes made the switch to the supersofts they held onto P1 with Bottas again the man to beat, a 1:42.742 for the Finn. Kimi Raikkonen was second, 0.095s down, while Hamilton was third.
Daniel Ricciardo was fourth ahead of Esteban Ocon and Max Verstappen, who had an issue late in the session. The Red Bull driver reported that “everything just switched off” as he stopped on the side of the track on the main straight.
Felipe Massa, who “almost crashed man” at Turn 8, was seventh ahead of Kvyat, Lance Stroll and Sergio Perez.
Sebastian Vettel, who sat out the final 20 minutes of FP3 due to a suspected leak, was P12.
1 Valtteri Bottas Mercedes 1:42.742
2 Kimi Raikkonen Ferrari 1:42.837 0.095
3 Lewis Hamilton Mercedes 1:43.158 0.416
4 Daniel Ricciardo Red Bull 1:43.287 0.545
5 Esteban Ocon Force India 1:43.344 0.602
6 Max Verstappen Red Bull 1:43.614 0.872
7 Felipe Massa Williams 1:43.738 0.996
8 Daniil Kvyat Toro Rosso 1:43.908 1.166
9 Lance Stroll Williams 1:44.040 1.298
10 Sergio Perez Force India 1:44.138 1.396
11 Nico Hulkenberg Renault Sport 1:44.312 1.570
12 Sebastian Vettel Ferrari 1:44.344 1.602
13 Carlos Sainz Toro Rosso 1:44.692 1.950
14 Fernando Alonso McLaren 1:44.741 1.999
15 Kevin Magnussen Haas 1:44.926 2.184
16 Stoffel Vandoorne McLaren 1:45.143 2.401
17 Romain Grosjean Haas 1:45.491 2.749
18 Marcus Ericsson Sauber 1:45.645 2.903
19 Pascal Wehrlein Sauber 1:45.722 2.980
20 Jolyon Palmer Renault Sport 1:53.040 10.298