diff --git a/Makefile b/Makefile
index b2b64b26b..fc2863c6c 100644
--- a/Makefile
+++ b/Makefile
@@ -4,6 +4,10 @@
 PROJECT_NAME := provider-jet-azure
 PROJECT_REPO := github.com/crossplane-contrib/$(PROJECT_NAME)
 
+export TERRAFORM_VERSION ?= 1.0.5
+export TERRAFORM_PROVIDER_SOURCE ?= hashicorp/azurerm
+export TERRAFORM_PROVIDER_VERSION ?= 2.78.0
+
 PLATFORMS ?= linux_amd64 linux_arm64
 
 # -include will silently skip missing files, which allows us
@@ -100,9 +104,8 @@ provider-jet-azure.vendor: prepare.azurerm vendor
 
 # must match Docker build file env. variable TERRAFORM_PROVIDER_AZURERM_VERSION in
 # cluster/images/provider-jet-azure-controller/Dockerfile
-AZURERM_REFSPEC ?= v2.78.0
 prepare.azurerm:
-	@WORK_DIR=.work AZURERM_REFSPEC=$(AZURERM_REFSPEC) ./scripts/prepare_azurerm.sh
+	@WORK_DIR=.work TERRAFORM_PROVIDER_VERSION=$(TERRAFORM_PROVIDER_VERSION) ./scripts/prepare_azurerm.sh
 
 codegen.pipeline: prepare.azurerm
 	@USE_INCLUDE_LIST=true go run cmd/generator/main.go
diff --git a/cluster/images/provider-jet-azure-controller/Dockerfile b/cluster/images/provider-jet-azure-controller/Dockerfile
index 77c74901b..cdde94405 100644
--- a/cluster/images/provider-jet-azure-controller/Dockerfile
+++ b/cluster/images/provider-jet-azure-controller/Dockerfile
@@ -7,7 +7,6 @@ ARG TERRAFORM_PROVIDER_SOURCE
 ARG TERRAFORM_PROVIDER_VERSION
 ARG TINI_VERSION
 ENV USER_ID=1001
-# must match Makefile variable AZURERM_REFSPEC
 ENV TERRAFORM_PROVIDER_VERSION=$TERRAFORM_PROVIDER_VERSION
 ENV TERRAFORM_PROVIDER_SOURCE=$TERRAFORM_PROVIDER_SOURCE
 
diff --git a/cluster/images/provider-jet-azure-controller/Makefile b/cluster/images/provider-jet-azure-controller/Makefile
index 245ffca0a..ee22430f1 100755
--- a/cluster/images/provider-jet-azure-controller/Makefile
+++ b/cluster/images/provider-jet-azure-controller/Makefile
@@ -2,12 +2,6 @@
 # Setup Project
 
 PLATFORMS := linux_amd64 linux_arm64
-# Terraform configuration
-# TODO(aru): how to pass these from root Makefile?
-TERRAFORM_VERSION ?= 1.0.5
-TERRAFORM_PROVIDER_SOURCE ?= hashicorp/azurerm
-# version specified here should currently match the `AZURERM_REFSPEC` variable of the root Makefile
-TERRAFORM_PROVIDER_VERSION ?= 2.78.0
 
 include ../../../build/makelib/common.mk
 
diff --git a/go.mod b/go.mod
index 918c2dca5..f9d633c02 100644
--- a/go.mod
+++ b/go.mod
@@ -8,7 +8,7 @@ require (
 	github.com/crossplane/terrajet v0.4.0
 	github.com/hashicorp/terraform-plugin-sdk/v2 v2.7.0
 	// github.com/hashicorp/terraform-provider-azurerm is replaced with  ./.work/.azurerm
-	// and the dependency version is specified in the Makefile via make variable AZURERM_REFSPEC
+	// and the dependency version is specified in the Makefile via make variable TERRAFORM_PROVIDER_VERSION
 	github.com/hashicorp/terraform-provider-azurerm v0.0.0
 	github.com/pkg/errors v0.9.1
 	gopkg.in/alecthomas/kingpin.v2 v2.2.6
diff --git a/scripts/prepare_azurerm.sh b/scripts/prepare_azurerm.sh
index c544fc63d..661269997 100755
--- a/scripts/prepare_azurerm.sh
+++ b/scripts/prepare_azurerm.sh
@@ -24,8 +24,8 @@ if [ ! -d "${REPO_DIR}/.git" ]; then
   git -C "${REPO_DIR}" remote add origin https://github.com/hashicorp/terraform-provider-azurerm
 fi
 
-git -C "${REPO_DIR}" fetch origin "${AZURERM_REFSPEC}"
+git -C "${REPO_DIR}" fetch origin v"${TERRAFORM_PROVIDER_VERSION}"
 git -C "${REPO_DIR}" reset --hard FETCH_HEAD
 
 mkdir -p "${REPO_DIR}/xpprovider"
-cp hack/provider.go.txt "${REPO_DIR}/xpprovider/provider.go"
\ No newline at end of file
+cp hack/provider.go.txt "${REPO_DIR}/xpprovider/provider.go"