diff --git a/build-tools/build-docker-images/build-stx-images.sh b/build-tools/build-docker-images/build-stx-images.sh
index f3caa4b7..e944a43c 100755
--- a/build-tools/build-docker-images/build-stx-images.sh
+++ b/build-tools/build-docker-images/build-stx-images.sh
@@ -112,6 +112,12 @@ function is_in {
     return 1
 }
 
+function starts_with {
+    local str="$1"
+    local prefix="$2"
+    [[ "${str#$prefix}" != "$str" ]]
+}
+
 function is_empty {
     test $# -eq 0
 }
@@ -121,20 +127,33 @@ function url_basename {
     echo "$1" | sed -r -e 's/[?#].*//' -e 's#.*/##'
 }
 
-# Usage: download $URL $OUTPUT_FILE
-function download_file {
-    local url="$1"
-    local out_file="$2"
-    if echo "$url" | grep -E -q -e '^https?:' -e '^ftp:' ; then
-        \rm -f "$out_file.tmp" || return 1
-        with_retries 5 wget -O "$out_file.tmp" "$url" || return 1
-        \mv -f "$out_file.tmp" "$out_file" || exit 1
+function local_path_to_url {
+    local path="$1"
+
+    local abs_path
+    abs_path="$(readlink -f "$path")" || exit 1
+
+    local repo_root
+    repo_root="$(readlink -e "$MY_REPO_ROOT_DIR")" || exit 1
+
+    local workspace_root
+    workspace_root="$(readlink -e "$MY_WORKSPACE")" || exit 1
+
+    local dflt_port
+    if starts_with "$abs_path" "$repo_root" ; then
+        dflt_port="8089"
+    elif starts_with "$abs_path" "$workspace" ; then
+        dflt_port="8088"
     else
-        local src_file
-        src_file="$(echo "$url" | sed -e 's#^file:/+##')"
-        \cp -a "$src_file" "$out_file" || return 1
+        echo "ERROR: $path: path must start with \$MY_REPO_ROOT_DIR or \$MY_WORKSPACE" >&2
+        exit 1
+    fi
+
+    if [[ -n "$BUILDER_FILES_URL" ]] ; then
+        echo "${BUILDER_FILES_URL}${path}"
+    else
+        echo "http://${HOSTNAME}:${dflt_port}${path}"
     fi
-    return 0
 }
 
 #
@@ -241,16 +260,6 @@ function patch_loci {
     \rm -rf "${WORKDIR}/loci/stx-wheels/"* || exit 1
 }
 
-function download_loci_wheels {
-    local url="$1"
-    out_file="${WORKDIR}/loci/stx-wheels/$(url_basename "$url")"
-    if [[ ! -f "$out_file" ]] ; then
-        echo "Downloading $url => $out_file" >&2
-        download_file "$url" "$out_file" || return 1
-    fi
-    return 0
-}
-
 function update_image_record {
     # Update the image record file with a new/updated entry
     local LABEL=$1
@@ -473,11 +482,7 @@ function build_image_loci {
             return 1
         fi
 
-        if [[ -n "$BUILDER_FILES_URL" ]] ; then
-            PROJECT_REPO="$BUILDER_FILES_URL/${CLONE_DIR}"
-        else
-            PROJECT_REPO="http://${HOSTNAME}:8088/${CLONE_DIR}"
-        fi
+        PROJECT_REPO="$(local_path_to_url "${CLONE_DIR}")" || exit 1
     fi
 
     local -a BUILD_ARGS=
@@ -487,14 +492,10 @@ function build_image_loci {
 
     if [ "${PYTHON3}" == "no" ] ; then
         echo "Python2 service ${LABEL}"
-        download_loci_wheels "$WHEELS_PY2" || exit 1
-        #BUILD_ARGS+=(--build-arg WHEELS=${WHEELS_PY2})
-        BUILD_ARGS+=(--build-arg WHEELS="/opt/loci/stx-wheels/$(url_basename "$WHEELS_PY2")")
+        BUILD_ARGS+=(--build-arg WHEELS=${WHEELS_PY2})
     else
         echo "Python3 service ${LABEL}"
-        download_loci_wheels "$WHEELS" || exit 1
-        #BUILD_ARGS+=(--build-arg WHEELS=${WHEELS})
-        BUILD_ARGS+=(--build-arg WHEELS="/opt/loci/stx-wheels/$(url_basename "$WHEELS")")
+        BUILD_ARGS+=(--build-arg WHEELS=${WHEELS})
     fi
 
     if [ ! -z "$HTTP_PROXY" ]; then
@@ -981,12 +982,16 @@ fi
 for var in WHEELS WHEELS_PY2 ; do
     # skip empty vars
     [[ -n "${!var}" ]] || continue
-    # skip network urls
-    echo "${!var}" | grep -E -q -e '^https?:' -e '^ftp:' && continue
+    # http(s) urls are supported by Loci directly -- skip
+    # See https://github.com/openstack/loci/blob/efccd0a853879ac6af6066eda09792d0d3afe9c0/scripts/fetch_wheels.py#L170
+    echo "${!var}" | grep -E -q -e '^https?:' && continue
     # remove file:/ prefix if any
     declare "$var=$(echo "${!var}" | sed -r 's#^file:/+##')"
     # resolve it to an absolute path
     declare "$var=$(readlink -f "${!var}")" || exit 1
+    # convert it to a local URL
+    url="$(local_path_to_url "${!var}")" || exit 1
+    declare "$var=$url"
 done
 
 # Find the directives files
diff --git a/build-tools/build-docker-images/loci/patches/0001-starlingx-wheels-from-filesystem-pkg-repos.patch b/build-tools/build-docker-images/loci/patches/0001-starlingx-enable-disable-package-repos.patch
similarity index 82%
rename from build-tools/build-docker-images/loci/patches/0001-starlingx-wheels-from-filesystem-pkg-repos.patch
rename to build-tools/build-docker-images/loci/patches/0001-starlingx-enable-disable-package-repos.patch
index e5449686..7715fc89 100644
--- a/build-tools/build-docker-images/loci/patches/0001-starlingx-wheels-from-filesystem-pkg-repos.patch
+++ b/build-tools/build-docker-images/loci/patches/0001-starlingx-enable-disable-package-repos.patch
@@ -1,39 +1,27 @@
-From 644ac10c8877444c540aac36111e59c65c47ce59 Mon Sep 17 00:00:00 2001
+From 7462c9467cd0a1e98ced03517646a4e00f65ddc3 Mon Sep 17 00:00:00 2001
 From: Davlet Panech <davlet.panech@windriver.com>
 Date: Thu, 8 Sep 2022 21:04:55 +0000
-Subject: [PATCH 1/2] starlingx: wheels from filesystem + pkg repos
+Subject: [PATCH] starlingx: enable/disable package repos
 
-- Allow WHEELS to be a local file path, rather than URL
-- Dockerfile: new parameter DIST_REPOS that allows one to
-  enable/disable package repos when building
+Dockerfile: new parameter DIST_REPOS that allows one to
+enable/disable package repos when building
 
 Signed-off-by: Davlet Panech <davlet.panech@windriver.com>
 ---
- .gitignore                         |   1 +
- Dockerfile                         |   6 +-
- stx-scripts/cleanup.sh             |   6 ++
- stx-scripts/install.sh             |  14 ++++
+ Dockerfile                         |   5 +-
+ stx-scripts/install.sh             |  11 +++
  stx-scripts/setup-package-repos.sh | 126 +++++++++++++++++++++++++++++
  stx-wheels/.keep                   |   0
- 6 files changed, 152 insertions(+), 1 deletion(-)
- create mode 100644 .gitignore
- create mode 100755 stx-scripts/cleanup.sh
+ 4 files changed, 141 insertions(+), 1 deletion(-)
  create mode 100755 stx-scripts/install.sh
  create mode 100755 stx-scripts/setup-package-repos.sh
  create mode 100644 stx-wheels/.keep
 
-diff --git a/.gitignore b/.gitignore
-new file mode 100644
-index 0000000..4b5032a
---- /dev/null
-+++ b/.gitignore
-@@ -0,0 +1 @@
-+stx-wheels/[^.]*
 diff --git a/Dockerfile b/Dockerfile
-index 3a026a3..145d284 100644
+index 3a026a3..3baea6c 100644
 --- a/Dockerfile
 +++ b/Dockerfile
-@@ -32,4 +32,8 @@ ARG SPICE_REF=${SPICE_REF:-spice-html5-0.1.6}
+@@ -32,4 +32,7 @@ ARG SPICE_REF=${SPICE_REF:-spice-html5-0.1.6}
  COPY scripts /opt/loci/scripts
  ADD bindep.txt pydep.txt $EXTRA_BINDEP $EXTRA_PYDEP /opt/loci/
  
@@ -41,26 +29,13 @@ index 3a026a3..145d284 100644
 +#RUN /opt/loci/scripts/install.sh
 +ARG DIST_REPOS
 +COPY stx-scripts /opt/loci/stx-scripts
-+COPY stx-wheels  /opt/loci/stx-wheels
 +RUN /opt/loci/stx-scripts/install.sh
-diff --git a/stx-scripts/cleanup.sh b/stx-scripts/cleanup.sh
-new file mode 100755
-index 0000000..6ac890f
---- /dev/null
-+++ b/stx-scripts/cleanup.sh
-@@ -0,0 +1,6 @@
-+#!/bin/bash
-+
-+set -ex
-+
-+rm -rf /opt/loci/stx-wheels/*
-+
 diff --git a/stx-scripts/install.sh b/stx-scripts/install.sh
 new file mode 100755
-index 0000000..033bdb9
+index 0000000..da11b75
 --- /dev/null
 +++ b/stx-scripts/install.sh
-@@ -0,0 +1,14 @@
+@@ -0,0 +1,11 @@
 +#!/bin/bash
 +
 +set -ex
@@ -72,9 +47,6 @@ index 0000000..033bdb9
 +
 +# run Loci installer
 +"$LOCI_DIR/scripts/install.sh" "$@"
-+
-+# delete wheel tarball etc
-+"$LOCI_DIR/stx-scripts/cleanup.sh"
 diff --git a/stx-scripts/setup-package-repos.sh b/stx-scripts/setup-package-repos.sh
 new file mode 100755
 index 0000000..dd43612