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UPDATE 1-Gazprom management recommends 20 pct dividend rise

* Dividend to increase to 7.2 rouble per share

(Changes sourcing, adds detail, share price, analyst comments)

MOSCOW, April 7 (Reuters) - The management of Russia's top gas producer Gazprom has recommended the board approve a 20 percent increase in dividend payouts on 2013 results, the company said on Monday.

It said the management recommended increasing the dividend to 7.2 roubles per share from the 5.99 roubles per share paid on 2012 results, confirming an earlier news report.

Gazprom had expected to offer between 6 and 8 roubles per share, and 7.2 roubles exceeds some analysts' expectations.

Gazprom shares pared losses made immediately after the report, but were still down 2.55 percent as of 1410 GMT - in line with the broader Russian market, which has been hit by heightened tensions over Ukraine.

"The increase in dividend is positive from the 5.4 percent of the dividend yield point of view, this is on the par with the Russian oil and gas sector," Constantine Cherepanov, and analyst with UBS in Moscow said.

Gazprom earmarks 25 percent of its net profit under Russian Accounting Standards - which normally refer only to the head company, not to subsidiaries - for dividends.

Gazprom would have increased the payout had it calculated the dividend by international reporting standards (IFRS), a move long expected by analysts.

Last week, business daily Vedomosti said the Russian government might allow state-controlled companies to cut their dividend payments by calculating them according to Russian accounting standards rather than international standards to help weather an economic downturn.

Gazprom has said in would use IFRS profit as a base for its dividend payout not earlier than 2014. The company's annual general meeting of shareholders will be held on June 27.

(Reporting by Vladimir Soldatkin, additional reporting by Denis Pinchuk,; Editing by Steve Gutterman and Mark Potter)

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