What concrete steps should the government take to address oil prices issue?

Get more people using public transport and walking/biking to and from places if possible. It could also actively research alternative energy sources and automobile power sources. For example, putting more money into the hybrid-developing companies rather than those which have no intention of 'going green' and promote research into solar power stations. All of these would lower the demand and the dependency on oil-based fuels; lower demand means a lower price for those still using it.