You will want to add the vegetables in this order to the cooking pan, onion, pepper and tomato. I usually cut the onion up first, into rings and then I either halve or quarter the rings depending on how large the onion is. It doesnt have to be chopped into small peices, but it's totally up to you.
Heat a medium sized non-stick skillet over medium heat until it starts to get hot. Then add the oil and let the oil sit for 30 seconds or so until it gets hot. Add the chopped up onion and let it cook on medium heat for about 5-10 minutes or until it starts getting soft and translucent. While the onion is cooking, start chopping up the yellow pepper into strips about a quarter of an inch thick and as long or short as you like.
Once the onion is nice and soft, add the yellow pepper. Let that cook for about 10 minutes or more, until it becomes soft. Make sure not to let the veggies burn at all, they should just be nice and soft during the cooking process. You may need to add a little more oil if the 2 tablespoons isnt quite enough to keep everything nicely coated. I usually have enough oil in the pan to let the veggies sort of "simmer" in it. You may want to add a little water here and there as well to keep the sauce from getting thick and from burning on the pan. The sauce should be thin enough to spoon onto meat and potatoes but thick enough to keep it's consistency. I usually add the water around the time where the tomatoes are added.
Once the pepper starts getting soft, cut the tomato up into quart inch thick slices, again the length is up to you, and add to the onion and pepper mixture. Let the juices from the tomato cook out into the pan to add some more liquid. I usually lower the temperature on the stove to a nice simmering temp at this point. You can keep the skin on the tomato and let it shrink as the tomato cooks. Once you notice the skin starting to shrink up and almost peel away from the tomato, add the paprika and let it cook a few minutes to let the flavor come out of the paprika. Then add vegeta to taste. I usually add about at least a teaspoon, just depends on how salty and flavorful you like it.
Spoon over potatoes, mashed, roasted, baked, anything.