Dioxygenase that catalyzes the alpha-oxidation of 2-hydroxy fatty acids in an iron-dependent manner (By similarity). Involved in metabolism of phytosphingosine and is required for proper endoplasmic reticulum stress response (By similarity). (R)-2-hydroxyhexadecanoate + O2 = CO2 + H2O + pentadecanoate Belongs to the MPO1 family.