The main objectives this paper is two-fold. First, the paper highlights the role of good road and traffic infrastructure for improving the on-road fuel economy of vehicle. Second, it investigate the dynamic driving parameters like positive tractive power level, modes of driving and velocity acceleration envelopes, affecting the on road energy demand and fuel economy.In this study, the gasoline passenger car was driven about 260 km each on two different intercity highways by same driver and at same load. The road and traffic condition of two highways was chosen entirely different, one highway as well organized and other as poorly organized. The fuel consumption and speed time trace were captured using on-board equipments in the field run. The average on road fuel economy was observed as 16.65 km/l (around 18% higher) for well organized highway as compared to 14.13 km/l for other highway.The analysis of speed and time trace for well organized and dis- organized highway trip for positive tractive power level distribution is summarized as:The gasoline vehicles are most fuel efficient in the mid power range and less efficient in the low and high power level range. It explains the fuel economy variation due to traffic conditions. The measured data variability is limited since the test was not repeated, however the fuel economy results are in line with the information collected from various drivers, who frequently drive the vehicle on the highways used in the study.The result of study emphasizes the need of investment for improving traffic infrastructure along with engine technologies and fuel quality for improvement in on-road fuel economy and emissions.