In a saucepan, heat 3 tablespoons olive oil over medium heat. Add the 1 finely chopped onion and saute until soft and translucent. Add the 2 cloves garlic (chopped finely) and cook until soft. Take care not to burn the garlic!
Add 1/2 cup water or white wine, 1 teaspoon sugar, and 1 large can peeled and diced tomatoes. Then mix in the pinch of chili flakes (optional) and cook for a few seconds. Bring to a boil; lower heat and allow to simmer for about 20 to 30 minutes, stirring occasionally, or until sauce reduces and thickens slightly.
Season with salt and pepper. Add 1 tablespoon chopped fresh basil and mix well. (If using dried basil, use just 1 teaspoon and add along with the chili flakes in Step 2. Adding it early on will allow the flavor and aroma of the dried herbs to be released.)
Scoop over pasta or place in sterilized jars then seal with airtight lids. Makes four cups.