Energy and Environment Minister Josh Frydenberg has completely rejected reports he could have inherited Hungarian citizenship from his mother, saying she is "upset because it raises a dark chapter in our family's lives".

A report on Thursday night suggested there was a "50 per cent likelihood" Mr Frydenberg was a Hungarian citizen by default, as his Jewish mother Erica was born in Budapest in 1943.

With her parents and sisters, the young Erica was interned for a time in the city's ghetto before fleeing the Holocaust. They lived in a displaced persons' camp and gained entry to Australia in 1950. Erica was made an Australian citizen in 1957.

"Months ago I told her that the Hungarian citizenship issue would one day be raised by somebody," Mr Frydenberg told Fairfax Media.