Premier Alison Redford of the Canadian state of Alberta has said that the fall in oil prices due to the widening gap between the selling price and the benchmark, will lead to a loss of $6 billion in lost royalty revenue in the coming financial year.

The provincial government has blamed a phenomenon called the `bitumen bubble' for the financial troubles of the state. An analysis has shown that the difference between the selling proice of oil from Alberta and the benchmark price for West Texas Intermediate touched a worrying $35 in the previous two years.

Redford had mentioned the bitumen bubble phenomenon earlier this year and said that sudden surplus of oil has driven down the price of Alberta oil sands products. However, industry players said that they have been warning of such a possibility from several years.

Industry members said that they had warned the government that backlogged pipelines and a saturated oil market in the US might occur and affect Alberta bitumen by resulting in steep discounts. The term `bitumen bubble' is most likely derived from the province's natural gas bubble during the second half of the 1990s.