What's the correct pronunciation for Luffy or Rufi?
This answer needs a premise.

You see, Japanese don't distinguish between the L and R sounds. The L doesn't really exist and the R is not pronounced like in English. It's more similar to the Italian/Spanish R but it's not rolled. Also, FI doesn't belong to the standard Kana — ha, hi, hu (fu), he, ho — but it's constructed.

Based on this, you could say both (and probably for Japanese there really isn't a difference like for us). But apparently Oda meant the name to be Luffy (can't find a source yet), and since the Japanese language cannot faithfully represent this name it became Rufi, being the closest match to the actual name.