Combine oil, onion, salt, pepper, tomatoes, cayenne, sugar, paprika and garlic powder in heavy pot and simmer 25 to 30 minutes over medium heat.
Mix flour and water in small bowl; add to onion mixture gradually, stirring until smooth and thick. Add cheese, stirring constantly to prevent sticking. Cook until well-blended and smooth.
Serve warm with tortilla chips.Makes 4 to 6 Source: