Preheat oven to 400º F. Don't use muffin tin liners, they will stick to the muffins. Grease the muffin tin instead.
Mix 1 1/2 cups flour, sugar, salt, basil, oregano, and baking powder. Add in vegetable oil, egg and 1/3 cup milk into flour mixture and stir until batter is smooth. It will be sticky. Add in another 2 tsbp milk. Fold/stir in cheese and pepperoni. Fill muffin cups about 2/3 full.
Bake for about 18 minutes until muffins turn out golden and knife inserted comes out clean. Right before eating, top muffins with the second cup of cheese and several slices of mini pepperoni and bake for another 4-5 minutes at 350º F until cheese is melted. Serve immediately.