Place oil in an 8-inch skillet, and turn heat to medium-high. When it’s hot, a minute or two later, add onion, salt and sugar. Cook, shaking pan occasionally, until onion browns, about 10 minutes.
Pour onion and oil into a fine strainer; reserve oil in refrigerator for another use. Stir onion into sour cream. If time allows, cover and refrigerate for 24 hours. Serve with potato chips or raw vegetables.