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In a saucepan, melt the butter over medium heat. Add the rice. Cook and stir until it's lightly browned.
Add the tomatoes, water, bouillon cubes, onion, garlic, bay leaf, sugar, salt and pepper to the rice, and bring everything to a boil. Reduce the heat.
Cover the rice and simmer it until the liquid is absorbed and the rice is tender, 10 to 15 minutes.
Remove the bay leaf before serving the rice.