Pizza Sauce is, as the name implies, sauce used for pizza. It is made from tomatoes and comes in a light blue can with the product's name written in green lettering within a yellow rectangle bordered with red and green ones.
Role in episode
When Mister Weiner rehired SpongeBob as Weenie Hut's fry cook and commands him to make the customers his Weenie Patties, Pizza Pete breaks in the restaurant's kitchen to free SpongeBob from the handcuffs that Mister Weiner put on, using pizza sauce, only for him to turn out to kidnap him to benefit his restaurant's business as well.
In a page of the You're Fired! book, it says that the Pizza Piehole manager used tomato sauce to free the chain from SpongeBob, however, he actually was using pizza sauce. Although, it may be because pizza sauce is made from tomato paste.