*** This bug is a duplicate of bug 1620678 ***
https://bugs.launchpad.net/bugs/1620678
My root partition is on /dev/sdb.
So changing the above command into
sudo grub-install /dev/sdb
sudo update-grub
sudo reboot
did the trick.
By the way, fresh install of Xubuntu 17.04 on reformatted partition.
This bug stems from upgrading Xubuntu 16.04 to 16.10 and it apparently
survived the formatting process.
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https://bugs.launchpad.net/bugs/1633839
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