The second phase of Iran's controversial electronic ration card scheme began on February 5, with IRR10mn ($6.25) in purchasing credit allocated per person across eligible households, government-owned Tasnim reported.

Iran's Ministry of Cooperatives, Labour and Social Welfare said the credit will be made available to households in stages.

The scheme aims to support various segments of the population following the removal of preferential foreign exchange rates for basic commodities, following a steep increase in food prices across the board. It was introduced as a political and economic response to Iran’s worsening cost‑of‑living crisis, with the stated aim of protecting low‑income households from high inflation and food-price shocks while the government reconfigures broader subsidy policies. The scheme also allegedly guarantees access to a basket of essential goods (meat, poultry, rice, oil, dairy, etc.) at controlled prices for the lower deciles, whose purchasing power had collapsed after years of inflation above 40%.

Access to the IRR10mn credit will be staggered as follows: the first to third deciles from February 5, the fourth to seventh deciles from February 10, and other households from February 15.

Unused credit from each month will be carried forward to the next month. Purchases can be made in multiple instalments, with no restrictions on the choice of brand or quantity of eligible goods. Any amount exceeding the allocated credit must be paid by the buyer.

Basic goods covered by the scheme include chicken, eggs, red meat, legumes, rock sugar, white sugar, cooking oil, pasta, rice, milk, yoghurt and low-fat cheese.

The second phase of the ration card programme follows the government's decision to shift basic commodity subsidies from the production chain to end consumers.

Prices for protein products, including chicken, meat and eggs, surged following the reforms but have since begun to ease, with fresh chicken prices in Tehran falling from a peak of IRR3mn per kg to below IRR2mn.

The government also began distributing subsidised frozen chicken at IRR1.32mn ($0.83) per kg through Meyadan chain stores and selected outlets on February 3.

Critics inside and outside the system argue that the "Kalabarg" ration card scheme is a largely symbolic, short‑term tool to manage poverty statistics and social tensions rather than a structural fix for the underlying inflationary and fiscal problems.

Following its introduction and amid fundamental structural changes in foreign currency allocation across Iran, the government faced large street protests that initially began outside the Charsou shopping mall in Tehran among mobile phone retailers. 

Those protests by shopkeepers quickly morphed into national protests, which brought thousands onto the street demanding a change in the political system of the country. Several thousand people were killed in the protests, with the exact figure unknown due to the government refusing to adjust its death toll figure of 3,117 in recent days.