diff --git a/.changeset/grumpy-owls-suffer.md b/.changeset/grumpy-owls-suffer.md
new file mode 100644
index 0000000000..977055eb33
--- /dev/null
+++ b/.changeset/grumpy-owls-suffer.md
@@ -0,0 +1,5 @@
+---
+'@backstage/plugin-scaffolder-backend-module-gitlab': patch
+---
+
+Allow the `createGitlabProjectVariableAction` to use oauth tokens
diff --git a/plugins/scaffolder-backend-module-gitlab/src/actions/gitlabProjectVariableCreate.examples.test.ts b/plugins/scaffolder-backend-module-gitlab/src/actions/gitlabProjectVariableCreate.examples.test.ts
index 1eeb01ca91..99b26682d8 100644
--- a/plugins/scaffolder-backend-module-gitlab/src/actions/gitlabProjectVariableCreate.examples.test.ts
+++ b/plugins/scaffolder-backend-module-gitlab/src/actions/gitlabProjectVariableCreate.examples.test.ts
@@ -26,7 +26,7 @@ const mockGitlabClient = {
     create: jest.fn(),
   },
 };
-jest.mock('@gitbeaker/node', () => ({
+jest.mock('@gitbeaker/rest', () => ({
   Gitlab: class {
     constructor() {
       return mockGitlabClient;
@@ -41,7 +41,7 @@ describe('gitlab:projectVariableAction: create examples', () => {
         {
           host: 'gitlab.com',
           token: 'tokenlols',
-          apiBaseUrl: 'https://api.gitlab.com',
+          apiBaseUrl: 'https://api.gitlab.com/api/v4',
         },
         {
           host: 'hosted.gitlab.com',
@@ -79,17 +79,18 @@ describe('gitlab:projectVariableAction: create examples', () => {
 
     expect(mockGitlabClient.ProjectVariables.create).toHaveBeenCalledWith(
       '123',
+      'MY_VARIABLE',
+      'my_value',
       {
-        key: 'MY_VARIABLE',
-        value: 'my_value',
-        variable_type: 'env_var',
-        environment_scope: '*',
+        variableType: 'env_var', // Correctly using variableType
+        environmentScope: '*',
         masked: false,
         protected: false,
         raw: false,
       },
     );
   });
+
   it(`Should ${examples[1].description}`, async () => {
     mockGitlabClient.ProjectVariables.create.mockResolvedValue({
       token: 'TOKEN',
@@ -102,14 +103,14 @@ describe('gitlab:projectVariableAction: create examples', () => {
 
     expect(mockGitlabClient.ProjectVariables.create).toHaveBeenCalledWith(
       '123',
+      'MY_VARIABLE',
+      'my-file-content',
       {
-        key: 'MY_VARIABLE',
-        value: 'my-file-content',
+        variableType: 'file', // Correctly using variableType
         protected: false,
         masked: false,
         raw: false,
-        environment_scope: '*',
-        variable_type: 'file',
+        environmentScope: '*',
       },
     );
   });
@@ -126,13 +127,13 @@ describe('gitlab:projectVariableAction: create examples', () => {
 
     expect(mockGitlabClient.ProjectVariables.create).toHaveBeenCalledWith(
       '456',
+      'MY_VARIABLE',
+      'my_value',
       {
-        key: 'MY_VARIABLE',
-        value: 'my_value',
         masked: false,
         raw: false,
-        environment_scope: '*',
-        variable_type: 'env_var',
+        environmentScope: '*',
+        variableType: 'env_var', // Correctly using variableType
         protected: true,
       },
     );
@@ -150,13 +151,13 @@ describe('gitlab:projectVariableAction: create examples', () => {
 
     expect(mockGitlabClient.ProjectVariables.create).toHaveBeenCalledWith(
       '789',
+      'DB_PASSWORD',
+      'password123',
       {
-        key: 'DB_PASSWORD',
-        value: 'password123',
         protected: false,
         raw: false,
-        environment_scope: '*',
-        variable_type: 'env_var',
+        environmentScope: '*',
+        variableType: 'env_var', // Correctly using variableType
         masked: true,
       },
     );
@@ -174,12 +175,12 @@ describe('gitlab:projectVariableAction: create examples', () => {
 
     expect(mockGitlabClient.ProjectVariables.create).toHaveBeenCalledWith(
       '123',
+      'MY_VARIABLE',
+      'my_value',
       {
-        key: 'MY_VARIABLE',
-        value: 'my_value',
         protected: false,
-        environment_scope: '*',
-        variable_type: 'env_var',
+        environmentScope: '*',
+        variableType: 'env_var', // Correctly using variableType
         masked: false,
         raw: true,
       },
@@ -198,14 +199,14 @@ describe('gitlab:projectVariableAction: create examples', () => {
 
     expect(mockGitlabClient.ProjectVariables.create).toHaveBeenCalledWith(
       '123',
+      'MY_VARIABLE',
+      'my_value',
       {
-        key: 'MY_VARIABLE',
-        value: 'my_value',
         protected: false,
-        variable_type: 'env_var',
+        variableType: 'env_var', // Correctly using variableType
         masked: false,
         raw: false,
-        environment_scope: 'production',
+        environmentScope: 'production',
       },
     );
   });
@@ -222,14 +223,14 @@ describe('gitlab:projectVariableAction: create examples', () => {
 
     expect(mockGitlabClient.ProjectVariables.create).toHaveBeenCalledWith(
       '123',
+      'MY_VARIABLE',
+      'my_value',
       {
-        key: 'MY_VARIABLE',
-        value: 'my_value',
         protected: false,
-        variable_type: 'env_var',
+        variableType: 'env_var', // Correctly using variableType
         masked: false,
         raw: false,
-        environment_scope: '*',
+        environmentScope: '*',
       },
     );
   });
diff --git a/plugins/scaffolder-backend-module-gitlab/src/actions/gitlabProjectVariableCreate.ts b/plugins/scaffolder-backend-module-gitlab/src/actions/gitlabProjectVariableCreate.ts
index a07ec747fa..3a9eeec0a1 100644
--- a/plugins/scaffolder-backend-module-gitlab/src/actions/gitlabProjectVariableCreate.ts
+++ b/plugins/scaffolder-backend-module-gitlab/src/actions/gitlabProjectVariableCreate.ts
@@ -16,10 +16,10 @@
 
 import { ScmIntegrationRegistry } from '@backstage/integration';
 import { createTemplateAction } from '@backstage/plugin-scaffolder-node';
-import { Gitlab } from '@gitbeaker/node';
+import { VariableType } from '@gitbeaker/rest';
 import { z } from 'zod';
 import commonGitlabConfig from '../commonGitlabConfig';
-import { getToken } from '../util';
+import { getClient, parseRepoUrl } from '../util';
 import { examples } from './gitlabProjectVariableCreate.examples';
 
 /**
@@ -72,6 +72,7 @@ export const createGitlabProjectVariableAction = (options: {
     },
     async handler(ctx) {
       const {
+        repoUrl,
         projectId,
         key,
         value,
@@ -80,21 +81,19 @@ export const createGitlabProjectVariableAction = (options: {
         masked = false,
         raw = false,
         environmentScope = '*',
+        token,
       } = ctx.input;
-      const { token, integrationConfig } = getToken(ctx.input, integrations);
 
-      const api = new Gitlab({
-        host: integrationConfig.config.baseUrl,
-        token: token,
-      });
-      await api.ProjectVariables.create(projectId, {
-        key: key,
-        value: value,
-        variable_type: variableType,
+      const { host } = parseRepoUrl(repoUrl, integrations);
+
+      const api = getClient({ host, integrations, token });
+
+      await api.ProjectVariables.create(projectId, key, value, {
+        variableType: variableType as VariableType,
         protected: variableProtected,
-        masked: masked,
-        raw: raw,
-        environment_scope: environmentScope,
+        masked,
+        raw,
+        environmentScope,
       });
     },
   });