The State will lose up to €700m this year if it does not increase excise duty on petrol and diesel, Minister for Public Expenditure Paschal Donohoe has warned.

Speaking with reporters at an event in Dublin, Minister Donohoe said while he understands public concerns, the decision in his view, is appropriate.

The Fine Gael TD said the price of diesel and petrol has "decreased significantly" since the excise duty reduction measures were introduced last year.

As of midnight on Wednesday, cuts to Government excise charges began to reverse.

Petrol prices rose by six cent per litre, while diesel went up by five cent. Agricultural diesel increased by one cent.

In March of last year, as fuel prices went up and up, the Government acted and cut the excise duty on fuel.

The cuts amounted to a 21 cent per litre reduction in the cost of petrol and a 16 cent cut on diesel.

Acknowledging calls to keep the price reduction measures in place, Minister Donohoe said that doing so could "cost the exchequer roughly €700m" this year.

"The excise changes that were brought in by the Government were necessary to reflect the fact that the price of diesel and petrol has now decreased significantly since we've brought in the additional excise reductions, when the excise reductions were brought in now just over a year ago, we were seeing the price of diesel and petrol going over €2.20.

"It's come down an awful lot since then, it's somewhere between €1.50 and €1.70 and with that in mind it's really important that we remove the tax reductions as the price of fuel itself has come down.

"What we're looking to do is remove those excise reductions on a phased basis across the rest of this year, and if we're not to do that the cost to the exchequer would be roughly €700m, which would have to come out of all our budget plans for 2024.

"So, I appreciate for many it's a moment that's going to see the price of fuel go up again, but it is in the context of the price of fuel and diesel and petrol coming down a lot from where we were in April or May last year," he said.

The excise increase became law at midnight, but all fuel retailers should not have to add them to retail prices immediately.

This is because excise is charged on fuel supplies that filling stations purchase and existing forecourt supplies will have had excise at the lower rate applied.