In a small saucepan over medium heat, combine water, 2 ½ tablespoons sugar, salt, and 2 tablespoons vegetable oil. Bring to a boil and remove from heat. Stir in flour until mixture forms a ball.
Heat oil for frying in a deep-fryer or deep skillet to 375°F (190°C). Pipe strips of dough into hot oil using a pastry bag. Fry until golden; drain on paper towels.
Combine ½ cup sugar and cinnamon. Roll drained churros in cinnamon and sugar mixture.