Step 1

Heat 2 tablespoons oil in a large skillet over medium. Add tomatoes, Kashmiri chiles, shallots, garlic, and Thai chiles; cook, stirring often, until mixture is tender and dry and starts to stick to bottom of skillet, 13 to 15 minutes. Transfer mixture to a large dish-shaped mortar and pestle (such as an Indonesian cobek and ulekan). Add terasi; crush together using pestle until mixture is mostly smooth but still has a little texture, about 5 minutes.

Step 2

Heat remaining 6 tablespoons oil in a large skillet over medium. Stir in tomato mixture; cook, stirring constantly, until mixture sizzles, about 2 minutes. Reduce heat to medium-low; stir in brown sugar, salt, and granulated sugar. Cook, stirring often, until chile mixture turns a shade darker and oil becomes saffron-colored, about 7 minutes. Transfer mixture to a small bowl; let cool 15 minutes.

Step 3

Heat remaining 6 tablespoons oil in a large skillet over medium. Stir in tomato mixture; cook, stirring constantly, until mixture sizzles, about 2 minutes. Reduce heat to medium-low; stir in brown sugar, salt, and granulated sugar. Cook, stirring often, until chile mixture turns a shade darker and oil becomes saffron-colored, about 7 minutes. Transfer mixture to a small bowl; let cool 15 minutes.