Heat oil and curry powder in a large skillet over medium-high heat for two minutes. Stir in onions and garlic, and cook 1 minute more. Add chicken, tossing lightly to coat with curry oil. Reduce heat to medium, and cook for 7 to 10 minutes, or until chicken is no longer pink in center and juices run clear.
Pour coconut milk, tomatoes, tomato sauce, and sugar into the pan, and stir to combine. Cover and simmer, stirring occasionally, approximately 30 to 40 minutes.