This is often mistakenly called Spanish Rice in the United States.

2 tablespoons vegetable oil or lard
1 medium onion, minced
2 garlic cloves, minced
1 cup uncooked Basmati or long-grain rice
2 cups chicken stock
2 small plum tomatoes, chopped, or
    1/2 cup canned tomato sauce
1 tablespoon ground dried New Mexico chile
3/4 teaspoon salt

Pour hot water over rice and let it stand for about 15 minutes. Drain the rice and rinse it well in cold water. Shake the sieve and let the rice drain for a while. Shake the rice to remove any excess water. 

In a saucepan, warm the peanut oil or lard over medium heat. Saut?the onion and garlic until softened. Add rice and saut?for another couple minutes, stirring to coat all the grains of rice with oil. Pour in the stock, add tomatoes or tomato sauce, sprinkle in the chile and salt, and bring to a boil. Reduce the heat to a simmer, cover the pan, and cook the rice for 15 to 18 minutes, until all the liquid is absorbed.

Remove the pan from the heat and let the rice steam, covered, for 5 to 10 minutes.

Fluff up the rice with a fork and serve warm.

Variation
When the rice has cooked for about 10 or 12 minutes, fold in 1 cup frozen peas and carrots which have been parboiled in salted water for 1 minute, then drained.