Leaders to a recent summit of the Association of Southeast Asian Nations (ASEAN) have vowed to cooperate in energy development to tackle with high oil prices.
Indonesia's President Susilo Bambang Yudhoyono suggested pooling resources to build refineries, developing alternative energy sources, and deepening cooperation with the oil-rich Middle East.
The Philippine government plans to set up an office to specifically handle programs and possible investment in alternative and renewable oil and energy sources.
China will give "top priority" to energy conservation. "Our goal is to cut the use of energy per unit of GDP by about 20 percent by 2010 and achieve energy conservation and efficiency for the whole country," said Chinese Premier Wen Jiabao at the summit in Kuala Lumpur, Malaysia, last week.
The soaring global oil prices have become a major blow to Asia, which has accounted for nearly a half of world economic growth since 1999.
High reliance on imported oil, heavy fuel price subsidies and growing energy demand in emerging Asian economies have made the region particularly vulnerable to the surging oil prices.
With oil price hitting all-time high this year and staying stubbornly high, the world's fastest growing region is now faced with inflationary pressures and a slowdown in GDP growth.
From low income oil-importing economy like the Philippines to wealthy net-oil exporter such as Malaysia, the oil price rises have no question to become the strongest headwind for their growth.
The oil shock is "preventing us from pursuing our economic development with vigor ... increasing poverty and further widening the gap between rich and poor countries," Philippine President Gloria Macapagal Arroyo told an Asia-Africa business forum here in April.
Indonesia is no exception. The Southeast Asia's only OPEC member has seen oil production sharply declining and oil importation on the rise.
The governments of Indonesia and Malaysia are heavily subsidizing domestic fuel sales to keep prices artificially low but such moves have proved to be very costly so far this year.
Malaysia cut subsidies on gasoline and diesel by 7 percent and 23 percent, respectively, earlier this year. Thailand started to completely end fuel subsidies in the mid of the year.
Given the growing crude oil and fuel imports, Indonesian fuel subsidy is estimated to reach as high as 113 trillion rupiah (US$11.3 billion) in this fiscal year, forcing the government to double domestic fuel prices.
The immediate results were hiking inflation and slowing GDP growth in the Southeast Asia's largest economy. The inflation in November soared to 18.38 percent year-on-year to hit the three- year high and growth in the second and third quarters slowed to 5. 84 percent and 5.34 percent, respectively, from a strong 6.12 percent in the first quater.
The Indonesian government has revised the 2005 growth projection from 6 percent to 5.8 percent at best.
The major risk for most Asian economies comes from oil price hike, once touched US$70 per barrel but now fluctuating around US$60.
The oil price hike has become "a particular danger in Asia because many of its economies are manufacturing-intensive and thus highly oil dependent," the International Monetary Fund (IMF) has warned.
The IMF forecasts Asia's growth to slow to about 6 percent in 2005, down 0.75 percentage points from 2004, and for emerging Asian economies -- China, India, China's Hong Kong, South Korea, Singapore, Chinese Taipei, Indonesia, Malaysia, the Philippines and Thailand -- growth is forecast at 7.5 percent, also slower than last year.
Fuel price hike also threatens to hamper growth in fast growing industrial countries like China and India, the main growth engines in the region and also major energy consumers.
Both countries have plenty of fuel-thirsty industries such as petrochemicals, cement and automotive.
China, which consumed much more energy resources than Japan in producing one unit of GDP, is certainly vulnerable to the oil shock this year.
The best way to cope with the soaring oil prices is to improve energy efficiency and develop alternative energy resources, according to Zhang Guobao, Vice Minister of the Chinese National Development and Reform Commission.
But even energy-efficient economies like Japan and South Korea are under great strain due to much higher oil price. Japan's growth is predicted to be stagnant at just above 2 percent while South Korea is expecting a reduction in growth, as soaring oil prices began to send impact on spending by consumers in the two countries.
The World Bank predicted that economic growth in developing countries will slow to 5.9 percent this year, down from 6.8 percent last year.
According to the World Bank's annual Global Economics Prospect report for 2006, the slowdown among industrial economies, which began in the second half of 2004, continued this year.
"High oil prices were one factor in dampening the global expansion," said Andrew Burns, one of the authors involved in the report.
Asia has shown impressive performance since 1999, with economic growth averaging 5.5 percent a year, and 6.75 percent a year in emerging Asia, the highest among other major regions in the world.
Asia's economic growth is predicted to remain the fastest in the world. However, the current oil shock has somewhat become a brake on the economy and threatened to derail Asia's growth momentum.