In The Evil Within 2, there's four resources: Green Gel, Red Gel, Weapon Parts, and High-Grade Weapon Parts. Green Gel/Red Gel is for upgrading Sebastian himself's stats and for some special use things, Weapon Parts are for upgrading your weapons/repairing broken weapons.
Red Gel and High-Grade Weapon parts are rarer, but are needed to unlock some higher skills for both Sebastian (with Red Gel) and weapons (with High-Grade Weapon Parts).
For using Green Gel, it's not like using it for ammo but some special abilities you can unlock with Green Gel use it (like I am not certain of this, but I think the time slowdown ability you activate while aiming if you purchase that skill consumes green gel).