June 7 (Bloomberg) -- The U.S. and Asia expressed ``serious concern'' over record oil prices one day after the market posted its biggest dollar gain ever, and urged consumer-nations to shift to alternative sources of fuel as energy costs rise.

Oil prices have reached ``unprecedented'' levels, officials from Japan, China, India, South Korea and the U.S. said in a joint statement issued after a meeting in Aomori in northern Japan today. Crude oil climbed $10.75 in New York yesterday to settle at $138.54 a barrel, its biggest one-day increase.

``There are few things we can do for the short term,'' U.S. Energy Secretary Samuel Bodman told reporters in Aomori today. ``There are things we can do on increasing efficiency and we are working on them.''

Prices more than doubled over the past year, sparking concern oil will fuel inflation and retard economic growth. The U.S. and the four Asian nations, together accounting for half the world's energy consumption, said today wider use of alternative fuels such as clean coal, nuclear power, and renewables will help bolster energy security.

Investing more in oil and gas to boost output capacity and greater effort in accessing petroleum reserves will also expand supplies of conventional fuels, helping to tame energy prices, according to the joint statement.

Cutting Subsidies

The governments of China and India, which sell fuels to domestic users below cost, were in agreement with the U.S., Japan and South Korea that ``a gradual withdrawal of fuel subsidies is desirable,'' the statement said.

India, Malaysia, Indonesia and Taiwan over the past month raised fuel prices and cut subsidies, in a move that may reduce Asian demand and slow global oil-consumption growth.

``This is the first time that we can agree on the necessity of abolishing fuel subsidies by steps,'' Japan's Trade Minister Akira Amari told reporters today. ``Each country has different reasons and contexts, so they cannot do that immediately.''

Prime Minister Manmohan Singh said India's fuel-price increase was ``inevitable'' in helping to protect government finances and narrowing oil refiners' losses. ``There are limits to which we can keep consumer prices unaffected by rising import costs.''

Scaling back on subsidies is a step forward in boosting energy efficiency and accelerating a quest for alternative sources, amid rising oil prices. Energy ministers from the Group of Eight industrialized nations, together with government officials from China, India and South Korea, are expected to set energy-conservation targets tomorrow when they meet in Aomori.

Saving Energy

Japan's Amari urged China and India, the world's fastest growing major economies, to join the International Partnership for Energy Efficiency Cooperation, which the G-8 plans to create by the end of this year.

``A key in setting numerical targets would be how much developed nations can accommodate the demands of developing countries in transferring conservation technology,'' Kenichiro Yamaguchi, chief consultant with the Global Warming Research Group at Mitsubishi Research Institute Inc., said this week.

Energy Ministers from the G-8 -- the U.S., Japan, Canada, Germany, France, U.K., Italy, and Russia -- will discuss the possibility of sharing alternative-energy technologies with China, India and South Korea. The 11 countries account about for two-thirds of global energy demand.

``Energy efficiency provides one of the most cost-effective short-term responses'' to record oil, the joint statement said.

To contact the reporters on this story: Megumi Yamanaka in Tokyo at myamanaka@bloomberg.net; Yuji Okada in Tokyo at yokada6@bloomberg.net.

Last Updated: June 7, 2008 07:07 EDT