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Premier Jim Prentice warned of a period of belt-tightening ahead as he revised the government’s oil forecast downward once again on Friday.

Just days ago, the Tory government said in its second quarter fiscal report that it would budget based on oil at $75 US a barrel for the rest of the 2014-15 budget year.

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But speaking to a Calgary Chamber of Commerce luncheon Friday, Prentice said the government now expects oil to be between $65 and $75 for the remainder of the fiscal year and into next year’s budget after OPEC producers decided not to cut production, sending oil prices plunging further.

The “low-price environment” will potentially cut $1 to $4 billion in oil royalties out of the province’s revenue stream.

Prentice told the audience of 600 people at the BMO Centre that the government will protect core services but efficiencies have to be found in all areas of government spending.

“We are spending a lot of money. We have no choice but to do a much better job because more money is no longer an option. It is not on the table,” he said.