The present study aims to reveal the relationship between liquidity and profitability so that every firm has to maintain this relationship while in conducting day to day operations. Liquidity means theability of a firm to meet its short term financial obligations. Liquidity is very important factor in the business. Liquidity is very necessary for survival of business. The firm should have to maintain balanced liquidity position which means that neither excess nor insufficient liquidity. Excess liquidity position may reduce profitability and insufficient liquidity position may create danger for the solvency of business. The main results of the study demonstrate that each ratio (variable) has a significant effect on the financial positions of petroleum companies with differing amounts and that along with the liquidity ratios in the first place. Profitability ratios also play an important role in the financial positions of organization. Every stakeholder has interest in the liquidity position of a company. Suppliers of goods will check the liquidity of the company before selling goods on credit. Employees should also be concerned about the company’s liquidity to know whether the company can meet its employee related obligations–salary, pension, provident fund, etc. Thus, a company needs to maintain adequate liquidity so that liquidity greatly affects profits of which some portion that will be divided to shareholders. Liquidity and profitability are closely related because one increases the other decreases. The main purpose of research work is to measure liquidity position and get idea about financial health and solvency of selected oil and gas refineries of India. The findings show that there is strong liquidity in selected oil and gas refineries of India.