During the last few years graphene has emerged as a potential candidate for electronics and optoelectronics applications due to its several salient features. Graphene is a smart material that responds to any physical change in its surrounding environment. Graphene has a very low intrinsic electronic noise and it can detect even a single gas molecule in its proximity. This property of graphene makes is a suitable and promising candidate to detect a large variety of organic/inorganic chemicals and gases. Typical solid state gas sensors usually requires high operating temperature and they cannot detect very low concentrations of gases efficiently due to intrinsic noise caused by thermal motion of charge carriers at high temperatures. They also have low resolution and stability issues of their constituent materials (such as electrolytes, electrodes, and sensing material itself) in harsh environments. It accelerates the need of development of robust, highly sensitive and efficient gas sensor with low operating temperature. Graphene and its derivatives could be a prospective replacement of these solid-state sensors due to their better electronic attributes for moderate temperature applications. The presence of extremely low intrinsic noise in graphene makes it highly suitable to detect a very low concentration of organic/inorganic compounds (even a single molecule ca be detected with graphene). In this article, we simulated a novel graphene nanoribbon based field effect transistor (FET) and used it to detect propane and butane gases. These are flammable household/industrial gases that must be detected to avoid serious accidents. The effects of atmospheric oxygen and humidity have also been studied by mixing oxygen and water molecules with desired target gases (propane and butane). The change in source-to-drain current of FET in the proximity of the target gases has been used as a detection signal. Our simulated FET device showed a noticeable change in density of states and IV-characteristics in the presence of target gas molecules. Nanoscale simulations of FET based gas sensor have been done in Quantumwise Atomistix Toolkit (ATK). ATK is a commercially available nanoscale semiconductor device simulator that is used to model a large variety of nanoscale devices. Our proposed device can be converted into a physical device to get a low cost and small sized integrated gas sensor.