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Energy consumption of a vehicle is greatly influenced by its driving behavior in highly interacting urban traffic. Strategies for fuel efficient driving have been studied and experimented with in various conceptual frameworks. This paper presents a novel control system to drive a vehicle efficiently on roads containing varying traffic and signals at intersections for improved fuel economy. The system measures the relevant information of the current road and traffic, predicts the future states of the preceding vehicle, and computes the optimal vehicle control input using model predictive control (MPC). A typical control objective is chosen to maximize fuel economy by regulating a safe head-distance or cruising at the optimal velocity under bounded driving torque condition. The proposed vehicle control system is evaluated in urban traffic containing thousands of diverse vehicles using the microscopic traffic simulator AIMSUN. Simulation results show that the vehicles controlled by the proposed MPC method significantly improve their fuel economy.