Miles per gallon (MPG) is a fuel economy rating determined by how far a car can travel on a gallon of gasoline or diesel. Although the metric version would be kilometres per litre, MPG is adopted in many metric-system countries, like Canada.
While it is both cheaper and better for the environment to achieve a higher MPG rating, there is a curve, that the EPA calls the "MPG Illusion" that shows the cost-benefits of increasing MPG decrease with higher rating. For example, to travel 1,000 miles, a car that gets 10 MPG will require 100 gallons of fuel. Conversely, a car that gets 15 MPG will require 67 gallons of fuel. In this case, an increase of just 5 MPG cuts fuel consumption by 33%. When a car gets 30 MPG, however, increasing its mileage to 35 MPG will only save 5 gallons of fuel over 1,000 miles.
Because of this "MPG Illusion," car makers in both the United States and Canada are beginning to list their cars' mileage in fuel consumption per distance. In Canada, this is done in liters per 100 kilometers (L/100km), and in the USA, this is done in gallons per 100 miles (gal/100mi).
Read more about miles per gallon here