The Chancellor was in Staffordshire to launch his pensioner bonds when he told the Express & Star bus companies that hiked prices as fuel costs rose should now offer discounts as they have come down.
Bus companies including National Express West Midlands and Arriva put the price of a single adult fare up 10p to £2.20 at the start of the month.
But the price of crude oil has plummeted and there are some forecourts, including one in Walsall, selling unleaded petrol for less than £1 a litre.
Asked if bus companies should reverse their fare increases Mr Osborne said:"Any company that had passed on the increase in the oil price a couple of years ago should pass on the decrease now.
"Whether that's energy companies, at the petrol pumps or airline tickets.
"A fall in the oil price is a real benefit but to feel the full benefit they have to have the saving passed on."
National Express West Midlands said it could not cut the price.
Spokesman Jack Kelly said: "We buy our fuel two to three years worth at a time which gives us stability in the oil price and protects customers from large increases in fares. Unfortunately that also makes it difficult to react quickly if there is a decrease."
The Chancellor has pledged to make Britain the richest major economy in the world by the 2030s if voters stick with his 'long term economic plan'.
Addressing a group of pensioners in Hatherton, on the border between South Staffordshire and Cannock, he said he wanted to 'reward savers'.
Yesterday the website selling the Government's new market-leading pensioner bonds struggled under the weight of demand from savers clamouring for better returns on their cash.
A pot of up to £10 billion has been put aside for the 65-plus bonds, which went on sale through the website of National Savings and Investments (NS&I).
Mr Osborne was visiting Oak Farm Hotel to talk to pensioners invited by South Staffordshire MP Gavin Williamson and Tory candidate for Cannock Chase, Amanda Milling.
He also pledged the Government would help hundreds of workers at Cadbury set to lose their jobs to find new ones and gain new skills and said he would be returning to the West Midlands to set out the region's own 'long term economic plan'.