Heat olive oil or vegetable oil in a 2-quart saucepan over medium low heat. Add the onion and cook until tender; add garlic and cook a few minutes more.

Stir in sugar, basil, salt, tomatoes with their liquid, and tomato paste. Heat mixture to boiling, stirring to break up tomatoes. Reduce heat to low; Cover saucepan and simmer 20 minutes to blend flavors, stirring occasionally.