Django tests in GitLab CI always use PostgreSQL instead of SQLite despite APP_ENV override

I am running Django tests inside GitLab CI and trying to switch between SQLite (for local/test) and PostgreSQL (for production).
My settings structure looks like this:

settings/_init_.py:

import os

APP_ENV = os.getenv("APP_ENV", "local")

if APP_ENV == "local":
    from .local import DATABASES 
elif APP_ENV == "production":
    from .production import DATABASES 
else:
    raise ValueError("Incorrect configuration")

production.py:

import os

DATABASES = {
    "default": {
        "ENGINE": "django.db.backends.postgresql",
        "NAME": os.getenv("POSTGRES_DB"),
        "USER": os.getenv("POSTGRES_USER"),
        "PASSWORD": os.getenv("POSTGRES_PASSWORD"),
        "HOST": os.getenv("POSTGRES_HOST"),
        "PORT": os.getenv("POSTGRES_PORT"),
    }
}

local.py:

from .base import BASE_DIR


DATABASES = {
    "default": {
        "ENGINE": "django.db.backends.sqlite3",
        "NAME": BASE_DIR / "db.sqlite3",
    }
}

In GitLab CI (.gitlab-ci.yml), my test job looks like this:

backend:test: 
    stage: test 
    image: python:3.13-slim 
    variables: 
        APP_ENV: local
    services:
       - name: postgres:15-alpine 
       alias: postgres 
    script: - uv run python manage.py test

What I expected

Tests should use SQLite when APP_ENV=local.

What actually happens

Tests always use PostgreSQL and fails with error.

Traceback:

django.db.utils.OperationalError: connection to server on socket "/var/run/[MASKED]ql/.s.PGSQL.5432" failed: No such file or directory
Is the server running locally and accepting connections on that socket?

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