Iran has imposed nationwide bread rations with penalties for bakers breaking the new rules amid the country's worst economic crisis since the birth of the Islamic Republic.

Eqtesad100, a prominent Iranian news website, scrutinized the contradictory statements from government officials and bakers in a detailed report on Sunday. The situation became more complex with reports circulating about a directive from the Baker's Union.

While some sources suggested citizens are prohibited from purchasing more than "four loaves with one bank card," Eqtesad100, citing confirmed reports from the union, indicated that the sale of "more than three Barbari breads with one bank card" is prohibited.

The reported restrictions, if violated by bakers, trigger a penalty, as they receive a notification of "unauthorized sale" in a specialized system.

Amir Karamlou, head of the inspection commission of the Traditional Bakers' Union in Tehran, said on Saturday that Tehran bakers must adhere to specific requirements.

“To earn certification, (Barbari) bakers must sell each sack of flour to 32 people, with each transaction involving a different bank card.”

The reports also indicate that the sale of more than 10 Lavash bread to a single individual is prohibited.

Contradicting the measures, Mohammad Jalal, the economic adviser to the economy minister, asserted three days ago that "nothing has happened in the field of bread supply." He described the new measures as an effort to “organize the bread situation and prevent the smuggling of flour and bread. Bakers are now required to register the amount of bread sold and conduct transactions exclusively through bank cards.”

However, an informed source confirmed a reduction in the flour quota provided by the government and bread rationing in specific areas, hinting at a potential review of plans to review subsidies and increase prices.

This contradicts earlier declarations by Iranian officials who categorized price hikes and rationing of traditional bread as red lines.

Introduced in April 2018 amid economic uncertainties triggered by former US President Donald Trump's withdrawal from the Joint Comprehensive Plan of Action (JCPOA), Iran's national subsidy aimed to stabilize prices for essential goods.

As the national currency faced a significant decline, the government, led by President Hassan Rouhani, provided cheap dollars to importers, particularly for vital commodities like flour.

On May 1, 2022, the parliament, despite warnings of increased inflation, approved the government's decision to eliminate the annual $10-14 billion subsidy for essential food and medicine. The move, coupled with an existing inflation rate of around 40 percent, resulted in a ten-fold increase in the price of flour.

To mitigate the impact on citizens, President Ebrahim Raisi's administration introduced a "smart plan" for the continued subsidy of bread. The government issued digital cards tied to specific purchases, aiming to prevent the smuggling of subsidized flour and bread to neighboring countries where they could be sold at significantly higher prices.

However, bakers have raised concerns about the ration card system, citing disruptions in trade during internet outages and delays in government reimbursement for subsidized bread. The challenges faced by bakers have highlighted issues with the implementation of the new system.

The substantial surge in flour prices, following the removal of subsidies, has had a ripple effect on various other goods, including pasta, biscuits, and cakes. These price increases have affected consumers, particularly those in vulnerable economic conditions. Additionally, bakeries offering non-traditional loaf breads operate at unsubsidized prices, creating disparities in the cost of different bread varieties.

In spite of this and in the face of global sanctions, Iran continues to pour billions of dollars' worth of funding into its regional proxies and the domestic military budget, while the nation faces crippling economic turmoil.

Palestinian groups alone such as Gaza based Hamas, have been found to receive around $100m annually, according to US government evidence. Larger proxies such as Hezbollah in Lebanon and the Houthis in Yemen, receive much more.