In a medium sauce pan over medium high heat, heat the oil. Add the peppers and onions. Cook for 10 to 15 minutes or until the peppers are softened.
Add the garlic and tomato paste and continue to cook for another minute or until the garlic becomes aromatic.
Add the vinegar, half the water, salt, and pepper. Lower the heat to low and continue to cook for about 25 minutes to allow the flavors to come together. Remove from heat and allow to cool slightly.
In a blender add the cooled mixture and blend until desired consistency using remaining water to loosen the sauce as desired.