Oil light blinks on dashboard?

This problem is noticed on 200 VW Beetle.Its 2.0 non turbo engine.Its Gas engine.

The 2.0 is typically an indestructible engine.

It's either an electrical issue, meaning a sending unit, or a mechanical issue, meaning either pump or other reason for low oil pressure.

I will suggest get the oil pressure test done.The oil pressure at 2k rpm should be between 3.0 and 4.5 bar.
And at idle, it should be 2.0 bar.
However, a new oil pressure sending unit is also very inexpensive ($24) and easily replaced. It lives at the top of the filter housing, here:See the image below :----

If the oil pump checks out faulty then Pump cost is $201 retail, and replacement time for oil pump is between 4.5 and 5.0 hours shop time for labor.

If you are not familiar with doing this repairs and replacement then,

A good independent Euro shop mechanic can do this job,but there is no such Auto repair shop near to your place,then your car dealer is the best option.

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For your help, there are few Car Engine oil related solved problem listed below. You can go through it.

Common Causes of Car Oil Leaks?

http://schematicsdiagram.blogspot.com/2011/12/common-causes-of-car-oil-leaks.html

Troubleshoot Car Oil leak?

http://schematicsdiagram.blogspot.com/2011/12/troubleshoot-car-oil-leak.html

Low oil pressure light on Dodge Magnum? 
http://howtobyme.blogspot.com/2011/11/low-oil-pressure-light-on-dodge-magnum.html 

Kia Sportage leaking oil from oil pan? 
http://howtobyme.blogspot.com/2011/11/kia-sportage-leaking-oil-from-oil-pan.html 
Car Turns OFF due to low oil pressure warning light?

http://schematicsdiagram.blogspot.com/2011/12/car-turns-off-due-to-low-oil-pressure.html

For more oil and oil pump details check out the direct links below: --- 

How to Replace Oil Pan on Audi A4 and VW Passat? 
http://repairhelpcenter.blogspot.com/2011/11/how-to-replace-oil-pan-on-audi-a4-and.html

How to Replace an Oil Pan Gasket? 
http://schematicsdiagram.blogspot.com/2011/07/how-to-replace-oil-pan-gasket.html

HOW TO REPLACE AN OIL PUMP 
http://schematicsdiagram.blogspot.com/2011/07/how-to-replace-oil-pump.html 

HOW TO CHANGE ENGINE OIL AND FILTER 
http://schematicsdiagram.blogspot.com/2011/07/how-to-change-engine-oil-and-filter.html 

HOW TO REPLACE AN OIL PRESSURE SWITCH (SENSOR) 
http://schematicsdiagram.blogspot.com/2011/07/how-to-replace-oil-pressure-switch.html 

How to Check Differential Oil Leaks and Replace Oil
http://schematicsdiagram.blogspot.com/2011/07/how-to-check-differential-oil-leaks-and.html 

HOW TO PERFORM A BASIC ENGINE TUNE UP-OIL CHANGE 
http://schematicsdiagram.blogspot.com/2011/08/how-to-perform-basic-engine-tune-up-oil.html 

KIA Sportage leaking oil from oil pan? 
http://howtobyme.blogspot.com/2011/11/kia-sportage-leaking-oil-from-oil-pan.html 

Oil pan Gasket on 1998 Toyota Tercel? 
http://howtobyme.blogspot.com/2011/11/oil-pan-gasket-on-1998-toyota-tercel.html 

Oil pressure for 2001 gmc jimmy V6? 

http://schematicsdiagram.blogspot.com/2011/12/oil-pressure-for-2001-gmc-jimmy-v6.html

How to replace Oil Pan on 2008 Honda Odyssey?

http://schematicsdiagram.blogspot.com/2011/12/how-to-replace-oil-pan-on-2008-honda.html

How to replace Oil Pressure Sensor on 2008 Honda Odyssey?

http://schematicsdiagram.blogspot.com/2011/12/how-to-replace-oil-pressure-sensor-on.html

How to replace Oil Pump on 2008 Honda Odyssey?

http://howtobyme.blogspot.com/2011/12/how-to-replace-oil-pump-on-2008-honda.html

Car oil leak?

http://schematicsdiagram.blogspot.com/2011/12/car-oil-leak.html

Car oil leaks from valve cover gasket?

http://schematicsdiagram.blogspot.com/2011/12/car-oil-leaks-from-valve-cover-gasket.html