US President Barack Obama on Friday unveiled a new deal with automakers on fuel economy standards that he said would be a crucial step towards reducing US dependence on foreign oil.

Obama -- flanked by the heads of Ford, General Motors and Chrysler as well as chiefs of Honda and Toyota -- said the new miles-per-gallon requirements would help people save money, with gas prices now "killing folks at the pump."

"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," the US president said in a speech at a convention center in the nation's capital.

"By 2025, the average fuel economy of their vehicles will nearly double to almost 55 miles per gallon," or 23.4 kilometers per liter, he said.

"Weve set an aggressive target, and the companies here are stepping up to the plate."

The program builds on initiatives unveiled in May 2009 that were aimed at both increasing gas mileage and decreasing greenhouse gas pollution for new cars and trucks -- the first such policy at the national level.

By 2016, the fleet average fuel consumption for US vehicles will be raised to 35.5 miles per gallon from the 25 miles per gallon seen in 2009.

Most passenger cars must reach 39 miles per gallon by 2016, and light trucks must satisfy fuel consumption regulations of 30 miles per gallon.

The companies joining Obama for Friday's announcement put some of their most fuel-efficient models on display for the occasion.

US gasoline prices have nearly reached historic levels since the start of the year due to market jitters over popular revolutions in oil-producing states across the Middle East and North Africa including Libya.

Obama said gasoline was "just another added expense when money is already tight" and while he acknowledged high prices were "not a new problem," he also admitted there was "no quick fix to the problem."

The president's approval rating has slumped as Americans face tough times, with the economy slow to recover and unemployment still high in the wake of the recession that ended in 2009.

Obama said the new efficiency standards would push automakers to develop new hybrid products and engine technologies, noting: "That means new jobs in cutting-edge industries all across America."

He paid tribute to what he called the "extraordinary progress" of the "Big Three" US automakers, two of which -- GM and Chrysler -- were saved by the government in 2009.

"After a period of painful restructuring, with the federal government lending a helping hand to two of the Big Three American automakers -- were seeing growth and a rise in sales, led by vehicles using new, more fuel-efficient technologies," Obama said.

"That tells us that these standards are going to be a win for consumers, for these companies, for our economy, for our security, and for our planet."