It's been a tumultuous few weeks for the price of oil, closing at just 79 dollars a barrel Monday. That's down significantly from the government's budget estimate, when they pegged the price of oil at 99 dollars a barrel.
The 20 dollar difference means that right now, government revenues could take a four billion dollar hit.
"They knew full well what they were doing, the PC's, when they projected record high oil prices in this global environment, and they've now got our backs against the wall because of it," says Wildrose finance critic, Rob Anderson.
However, finance minister, Doug Horner, says these prices are just a snapshot in time.
"Our year to date average is under what our projection was, by about three or four dollars right now. So, it is something that we are monitoring very closely," Horner says adding, "Realistically, lets think about it, 80 dollar oil is still 80 dollar oil. We're still in a very good financial position for the world marketplace."
Economist Robert Dixon says we're in a glut of oil. The oilsands are creating close to two million barrels of oil per day. There is also an international oil glut, with the Saudis producing an increased amount of oil as well.
Dixon says it's hard to predict where the price of oil will be six months from now, but believes these prices will probably stick around until October or November.
He says low oil prices ultimately affect Alberta's bottom line however, believes the province has some flexibility to work with.
"It will provide an opportunity for them to move into fiscal discipline to not depend on oil revenues as much," says Dixon.
The next quarterly update for the budget is due to be released to the public at the end of this week.
With files from Vassy Kapelos.
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