His comments come after a review into the 33.3 per cent increase in electricity prices which were imposed during October, which provoked a fair degree of anger across the country.
Mr Osborne told the newspaper that "costs have been hedged to a considerable degree" but added the price drops will "not reflect the full fall in the price of crude oil".
He added: "We will make the announcement before Christmas; it is too early to say how much it will go down, but the wholesale market is quite sharply down."
Richard Haddelsey, from energy analysts McKinnon & Clarke, recently told the Daily Mail that utility companies in the UK are slower to pass on reductions in wholesale gas and electricity prices than other firms across Europe.
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