Washington, Jul 30 (IANS): Blaming growing demand for oil in countries like China and India for rising gas prices, President Barack Obama has unveiled a plan to improve the fuel efficiency of US vehicles to 54.5 miles per gallon by 2025.

"For the last few months, gas prices have just been killing folks at the pump," he told auto industry executives Friday at an event here announcing new auto fuel-economy standards beginning in 2017.

"For decades, we've left our economy vulnerable to increases in the price of oil. And with the demand for oil going up in countries like China and India, the problem is only getting worse," Obama said.

"The demand for oil is inexorably rising far faster than supply. And that means prices will keep going up unless we do something about our own dependence on oil. That's the reality," he said.

The new pact builds on an agreement the government and car companies struck two years ago that mandated a sharp rise in gas mileage for cars and light trucks from model years 2012 to 2016.

The plan has the backing of auto companies like Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo, which the White House said account for over 90 percent of all vehicles sold in the United States.

"This agreement on fuel standards represents the single most important step we've ever taken as a nation to reduce our dependence on foreign oil," Obama said.

Friday's announcement extends a 2009 agreement with the auto industry to improve fuel efficiency in the next five years. The event included a display of recent models, including the all-electric Nissan Leaf and various hybrid options, which have "benefited from that standard," he said.