Heat the oil in a pan over medium high heat. Add onions and cook, stirring until softened.
Lower heat to medium and stir through the tomato paste and cook for 1 minute. Add the tomatoes, stir well and cook for 5-8 minutes until tomatoes are softened, stirring occasionally.
Remove from heat, stir in sugar. Set aside to cool. When tomato mixture has cooled, use a stick mixer to blend the sauce to desired texture. Blend more for a smoother sauce. Season with salt and pepper.