fly.io ENV available in Dockerfile

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Im trying to access env variables that are specified in the fly.toml file in the Dockerfile when running flyctrl deploy however they are always showing as empty strings. Am i doing something wrong here?

[env]
  API = "ABC"
ARG API
ENV API $API
RUN echo $API // prints Run echo
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Turns out this can be done with '[build.args]'

[build.args]
  API = "ABCD"