Energy is a critical driver of economic growth and industrial development. Being endowed with vast energy resources, Nigeria faces persistent challenges in effectively managing and utilising its energy mix to stimulate economic progress. This paper examines Nigeria’s current energy mix configuration, utilisation, and management; the hurdles hindering optimal utilisation; and the prospects for sustainable economic growth through efficient energy management, using a descriptive and investigative approach. This paper explores various energy policy directions and strategies required to drive energy efficiency to accessibility, affordability, availability and sustainability. The implication of this study is influenced by and geared towards re-engineering several energy mix policies and initiatives, such as the National Renewable Energy and Energy Efficiency Policy (NREEEP), Nigeria Energy Transition Plan (ETP), National Energy Policy (NEP), National Energy Master Plan (NEMP), and the most recent, Presidential Initiative on Compressed Natural Gas (Pi-CNG). It is observed that these policies and initiatives are aimed at contributing immensely to an effective energy mix and diversification, promoting economic growth and prosperity through accelerated employment generation, improving revenue earnings, reducing the carbon footprint, and advancing sustainable development goals. Findings have shown that poor implementation of these policies and initiatives, often due to a lack of political will, conflicts of interest within the political class, and elitist influence, has stalled continued adherence to the implementation processes of these aforementioned policies. However, it ought to be encouraged that policy initiatives and strategies are not good enough unless they are implemented and monitored to endure over time. So that potential prospects in energy diversification and management will be accomplished with adequate collaboration among all stakeholders to harness the opportunities of energy mix utilisation for cost-effective and environmentally sustainable solutions. This review presents a comprehensive overview of current energy mix management, current practices in the petroleum industry, and opportunities to be leveraged in other sectors. A detailed account of policy directions and initiatives is presented, with associated challenges and ways they can be utilised for opportunities and prospects.