U.S. to propose most aggressive auto fuel standards

WASHINGTON (Reuters) - President Barack Obama will propose on Tuesday the most aggressive U.S. auto fuel efficiency standards ever, a policy that also aims to resolve a dispute with the state of California over cutting tailpipe emissions.

A senior administration official, speaking to reporters late on Monday on the condition of anonymity, said average fuel standards for all new light vehicles sold in the United States would rise by 10 miles per gallon over today's performance to 35.5 mpg between 2012-16.

Tailpipe emissions would fall by more than 30 percent, the official said.

U.S. and key overseas automakers, like distressed General Motors Corp and efficiency leader Toyota Motor Corp of Japan, support the plan, an industry trade group said.

California officials also supported the proposal, the official said.

(Reporting by John Crawley, editing by Philip Barbara)