diff --git a/mercurial/dispatch.py b/mercurial/dispatch.py
--- a/mercurial/dispatch.py
+++ b/mercurial/dispatch.py
@@ -919,7 +919,8 @@
                 return
             hgvfs = vfs.vfs(os.path.join(path, b".hg"))
             sharedvfs = localrepo._getsharedvfs(hgvfs, requirements)
-            ui.readconfig(sharedvfs.join(b"hgrc"), path)
+            root = sharedvfs.base
+            ui.readconfig(sharedvfs.join(b"hgrc"), root)
     except IOError:
         pass