Should a cheap fork be oiled / lubricated from time to time?
If yes, how?
Best is to try. Apply cheep oil form the hardware store (fine machine oil, $1) on both stanchions near the dust seals, compress several times, then wipe off the excess. See if the fork performs any better.
My XCR fork does really begin acting like a fork, after I disassemble it, clean and grease. On the other hand, servicing a similarly-priced fork provided no benefit at all.