Heat the oil in an 8-inch size skillet over medium heat.
Add the onion, a pinch of salt, and the sugar and sauté until the onion turns golden -- about 10 to 12 minutes. Turn the heat down if things are browning too fast.
Drain the onion and oil mixture in a fine wire mesh strainer until cool. Discard the oil or save it for another purpose.
Mix the drained, fried onion with the sour cream and buttermilk (if desired for a thinner dip) and season with salt and white pepper to taste.
Refrigerate covered for at least 3 hours before serving; however, 6 to 24 hours is even better for flavor development.
Notes
It the dip is still too thick after refrigeration, just stir in a bit more buttermilk to get the desired consistency.