In a large bowl, combine flour, baking powder and salt. Cut in butter until mixture resembles coarse crumbs.
Stir in milk and oil just until moistened.
Turn dough out onto a lightly floured surface; knead lightly 10 times.
Roll or pat dough to 1/2 inch thickness; cut with a 2 inch biscuit cutter.
Place biscuits on an ungreased baking sheet. Bake 12 minutes or until golden brown.
To make the gravy: In a medium saucepan over medium heat, melt 4 tablespoons of butter. Stir in 1/4 cup of all-purpose flour until smooth. Gradually whisk in 2 cups of milk. Cook, stirring constantly, until thickened and bubbly. Season with salt and pepper to taste.