In the oil pan.
Low oil pressure almost always requires an engine rebuild to fix.
Try a thicker oil. VW's and diesels use 15w-40 or 20w-50. Quick lube shops put 5w30 in everything, and it will wreck a Volkswagen.
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It does.
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to the right of the oil dip stick
Yes VW Diesel injection pumps can be rebuilt. The pump needs to be bench tested afterwards using Bosch specs
5w-30 or 5w-40 is what is recommended by VW for use in your Beetle. If it's the 1.9L Diesel, use 5w-40 Diesel oil. Regular oil doesn't have the added detergents etc that this diesel brand does.
The fuel pump is the injection pump located next to the alternator and is run by the timing belt.
Oil pump failure
on the front of the engine
5w40 is strongly recommended. If it is diesel check to make sure the oil meets the proper VW specs
it should be by the oil filter, which is in front of the block